Crude Comment 16/06/09

Overview:

Crude came off hard yesterday largely on the back of a significant strengthening in the US dollar against the Euro following the European Central Bank's biannual review which mentioned the possibility of more tests for the continent's financial sector. A sharp plunge in the equity market added extra pressure showing (along the currency market) its capability of dragging the energy complex back down in the face of supportive technicals. However geopolitics with the apparent re election of Ahmadinejad in Iran and increasing supply disruptions in Nigeria are likely to remain meaningful supportive features.

9 day moving average - $70.34 14 day moving average - $69.04 40 day moving average - $60.76

Technical Report:

We saw a sharp sell off in crude yesterday in a one way traffic from the opening which ended with $1.85 loss at $70.30. The move was significant taking the market price below the 9 day moving average briefly, thus giving us the first bearish signal after an impressive string of consistent rallies. Nevertheless crude investors should be reluctant in reading too much into the decline and rather see it as an awaited pullback / consolidation given the technical picture remains bullish.

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

WTI:

Support: $69.49 (yesterday's low) Resistance: $73.23(high of 11/06/09)

Support:$68.44 (low of 09/06/09) Resistance: $72.60(high of 12/06/09)

Support:$67.50 (low of 05/06/09) Resistance: $72.15(yesterday's high)

OIL (BRENT):

Support: $68.56 (yesterday's low) Resistance: $72.27 (high of 11/06/09)

Support:$68.24 (low of 09/06/09) Resistance: $71.64 (high of 12/06/09)

Support:$67.35 (low of 05/06/09) Resistance: $70.93 (yesterday's high)