Crude Comment 13/05/09

Overview:

With the technical picture improving on a day by day basis it was no surprise to see crude continuing to edge higher in a move triggered as usual by further weakness in the US dollar. From a fundamental point of view this price advance in crude is difficult to justify as market participants keep ignoring the present supply vs demand clash and rather focus on hopes of better days ahead. Today's EIA stats are expected to show a small build in crude stocks but its impact could be limited if any, given the strong buying momentum.

9 day moving average - $56.64 14 day moving average - $54.44 40 day moving average - $51.96

Technical Report:

The rally in crude continued as resistance around the $58.57 - $58.73 area was broken convincingly. The important feature in yesterday's trading session was crude breaching above the $60.00 level reaching an intraday high of $60.06 which also represents a record high for 2009. Overall crude gained 93 cents to settle at $59.30 and is now looking at $61.06 ( high of November 11 th ) as the next upside target. Technically, the bullish moving averages and the fact that we're seeing new highs suggest the upwards trend remains intact.

The short term trend is bullish, the medium term trend is sideways and the long term trend is bearish.

WTI:

Support: $57.80 (yesterday's low) Resistance: $62.87(high of 07/11/08)

Support:$56.80 (low of 11/05/09) Resistance: $61.06(high of 11/11/08)

Support:$55.42 (low of 07/05/09) Resistance: $60.06(yesterday's high)

OIL (BRENT):

Support: $5 6.87 (yesterday's low) Resistance: $ 61.98 (high of 10 /11/08)

Support:$5 6.31 (low of 11 /05/09) Resistance: $59.43 (high of 07/11/08)

Support:$5 5.43 (low of 0 7 /05/09) Resistance: $58. 91 (yesterday's high

DOE Stock estimates (change in millions of barrels)

Crude +1.3 Distillates+1.3 Gasoline unchanged