Crude Comment 29/05/09

Overview:

Yesterday's strong rally in crude was undoubtedly triggered by a combination of factors: further weakening in the US dollar accompanied by a renewed strengthening in the equity markets but technical trading also seems to add significant momentum influence. Later on, the EIA stats showed a bigger than expected draw in crude inventories accentuating the upward move although the surprise number didn't bring any significant shift in the overall fundamentals of the energy complex. As anticipated, the OPEC decided to maintain the current quota so the impact on crude's advance was only limited.

9 day moving average - $62.22 14 day moving average - $60.74 40 day moving average - $54.63

Technical Report:

Crude posted again another impressive rally gaining $1.95 to settle at $64.83 in a day when the price was in positive territory for most of the time. Reaching an intraday high of $65.44 is surprise - surprise the new high for the year, last seen on Nov 10 th 2008. Technically the chart shows a bullish picture with record highs on a daily basis in the last few days and all moving averages pointing convincingly higher. It can also be noted little resistance between the current levels and around $69.00.

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

WTI:

Support: $62.77 (yesterday's low) Resistance: $68.61(high of 31/10/08)

Support:$62.20 (low of 27/05/09) Resistance: $65.57(high of 10/11/08)

Support:$60.85 (low of 25/05/09) Resistance: $65.44(yesterday's high)

OIL (BRENT):

Support: $61.78 (yesterday's low) Resistance: $66.47 (high of 31/10/08)

Support:$60.99 (low of 27/05/09) Resistance: $66.00 (high of 05/11/08)

Support:$59.85 (low of 25/05/09) Resistance: $64.68 (yesterday's high)

DOE Stock Figures (change in millions of barrels)

Crude -5.4 (-0.9) Distillates+0.2 (+1.2) Gasoline -0.5 (-2.0)