Crude Comment 11/06/09

Overview:

The strength of the current bullish trend in crude was underscored again yesterday by the oil market ability to advance on its own despite some weakening in the equity markets combined with a rebound in the US dollar. This could be the early signs the rally is getting powerful enough to go on its own without the late assistance of currency / stocks even raising questions of a decoupling. Nevertheless, the driver was also the surprise EIA data showing a much larger than expected draw in crude stocks bringing significant support to a market looking for any reason to justify its higher moves.

9 day moving average - $69.13 14 day moving average - $67.17 40 day moving average - $59.13

Technical Report:

The rally in crude continued yesterday taking the market price to fresh highs last seen on Oct 21 st 2008 and ending with 90 cents gain at $71.50. The fact that it was one way traffic for most of the day with the exception of a short lived pullback in early trading reiterates the seriousness of this bullish trend. Testimony is also the price action in the last 4 months showing steady rallies combined with healthy periods of consolidation and the moving averages closely following suit. However the market has the capacity for a retracement of around 5 dollars towards the short term moving averages whilst still maintaining its bullish impetus.

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

WTI:

Support: $70.51 (yesterday's low) Resistance: $75.85(high of 21/10/08)

Support:$68.44 (low of 09/06/09) Resistance: $74.28(high of 17/10/08)

Support:$67.50 (low of 05/06/09) Resistance: $71.78(yesterday's high)

OIL (BRENT):

Support: $69.92 (yesterday's low) Resistance: $73.29 (high of 21/10/08)

Support:$68.24 (low of 09/06/09) Resistance: $71.90 (high of 17/10/08)

Support:$67.35 (low of 05/06/09) Resistance: $71.20 (yesterday's high)

DOE Stock Figures (change in millions of barrels)

Crude -4.4 (-0.4) Distillates-0.3 (+1.2) Gasoline -1.5 (+1.3)