Crude Oil Hits $80/bbl on Lower Inventories

18 November 2009 @ 01:00 pm EDT

Crude futures have just breached their psychological $80/bbl level in reaction to weekly inventories coming in -1.7 million bbl below analyst expectations. Since the Dollar and U.S. equities are consolidating right now, today's positive performance from crude appears to stem directly from the -0.9 million bbl decrease in inventories this week. However, the $80/bbl area has proven to be a tough trading zone over the past month. Therefore, crude futures could have trouble getting beyond October highs should neither U.S. equities nor the Dollar work in crude's favor. As a result, investors should continue to monitor the EUR/USD's interaction with 1.50 and the S&P's behavior towards 1100. A topside breakout in either could help crude add on to present gains due to their positive correlations.

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