Crude Comment 28/05/09

Overview:

Despite a weaker equity market and a strong tone in the US dollar crude managed to stay in the positive territory for most of the session largely on support from technicals. Some analysts also mentioned a bullish gasoline market dragging crude higher as well as few refineries issues being resolved in the US and Canada. Today's EIA stats are expected to show a minor draw in crude inventories and like always in case of surprises could move the oil market especially if larger than anticipated. But probably the OPEC meeting in Vienna will steal the limelight although investors will be looking for rhetoric rather than real action.

9 day moving average - $61.03 14 day moving average - $60.14 40 day moving average - $54.17

Technical Report:

Following an early decline crude re-established its advance breaking the short term target of $63.00 mentioned in yesterday's ‘Oil Report'. Probably the most important feature was crude making again a new record high for 2009 at $63.81 although later on it gave back part of the gains following some mild profit taking. Advancing 30 cents for the day and settling at $63.00, above the previous day's high confirms the upward trend in crude which is also supported on the chart by the bullish moving averages.

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

WTI:

Support: $62.20 (yesterday's low) Resistance: $65.57(high of 10/11/08)

Support:$61.03 (9 day moving average) Resistance: $65.48(high of 06/11/08)

Support:$60.85 (low of 25/05/09) Resistance: $63.81(yesterday's high)

OIL (BRENT):

Support: $60.99 (yesterday's low) Resistance: $66.00 (high of 05/11/08)

Support:$59.85 (low of 25/05/09) Resistance: $63.59 (high of 27/10/08)

Support:$58.83 (low of 21/05/09) Resistance: $62.75 (yesterday's high)

DOE Stock estimates (change in millions of barrels)

Crude -0.9 Distillates+1.2 Gasoline -2.0