Crude Comment 15/05/09

Overview:

Crude decline in early trading yesterday seemed to have a note of caution attached to it as traders avoided an aggressive selling following the highly supportive EIA stats. Later on the decision proved to be the right one as a weaker US dollar and an advance in the equity markets have retaken their roles of main drivers in the energy complex pushing crude back higher. Today's positioning ahead of week end should give a better indication of market sentiment suggesting the next possible direction in crude.

9 day moving average - $58.56 14 day moving average - $56.54 40 day moving average - $53.92

Technical Report:

Initially crude moved lower yesterday even crossing below the 9 day moving average and thus giving us a bearish signal. Nevertheless the decline proved short lived as additional buying power came to the market pushing oil price back up. As a result crude finished the day 60 cents up settling at $59.39 and it remains to be seen if the next move will be lower towards the moving averages or crude is ready again to challenge the $60.00 level. Failure to break $60 region will technically point to a $55 - $60 range similar to that seen earlier in the month where parameters of $50 -$55 were applicable.

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

WTI:

Support: $57.54 (yesterday's low) Resistance: $60.86(high of 12/05/09)

Support:$56.72 (low of 07/05/09) Resistance: $60.70(high of 13/05/09)

Support:$55.13 (low of 06/05/09) Resistance: $59.85(yesterday's high)

OIL (BRENT):

Support: $56.00 (yesterday's low) Resistance: $59.05 (high of 13/05/09)

Support:$55.43 (low of 07/05/09) Resistance: $58.09 (high of 11/05/09)

Support:$53.86 (low of 06/05/09) Resistance: $57.28 (yesterday's high)