Overview:

Whilst widely agreed that the ongoing advance in crude is primarily driven by technical buying, a strong Euro versus the US dollar breaching back above the $1.40 level was interpreted as the trigger point for beefing up the long side of the oil. And one interesting feature in yesterday's price action was the weaker dollar's capability of trumping a lifeless equity market in pushing crude higher. Today's EIA report is not expected to show any significant shift in the overall picture of the fundamentals and given the current inertia is likely to have limited impact especially if they are on the bearish side.

9 day moving average - $68.44 14 day moving average - $66.36 40 day moving average - $58.56

Technical Report:

After stopping for a breather in the last few days, the rally in crude re-emerged with a vengeance pushing the market price convincingly above the $70.00 level. Along with reaching an intraday high of $70.69, a fresh record high for 2009 crude finally managed to close above $70.00 mark settling at $70.50 with $1.66 gain. Being just a matter of time before the bulls would achieve that, probably the last drop was provided once the market participants realised the 9 day moving average is indeed good support and any pullback repeatedly failed to breach it.

The short and medium term trends are bullish and the long term trend is bearish.

WTI:

Support: $68.44 (yesterday's low) Resistance: $71.75(high of 04/11/08)

Support:$67.50 (low of 05/06/09) Resistance: $71.20(high of 22/10/08)

Support:$66.79 (low of 08/06/09) Resistance: $70.69(yesterday's high)

OIL (BRENT):

Support: $68.24 (yesterday's low) Resistance: $71.90 (high of 17/10/08)

Support:$67.35 (low of 05/06/09) Resistance: $70.15 (high of 16/10/08)

Support:$66.88 (low of 08/06/09) Resistance: $70.06 (yesterday's high)

DOE Stock estimates (change in millions of barrels)

Crude -0.4 Distillates+1.2 Gasoline +1.3