Crude Comment 05/05/09

Overview:

The bullish leadership from the financial markets continues to have the upper hand in deciding the short term direction for crude. Yesterday, in the absence of Tokyo and London closed for holiday, it was left to the Dow Jones to provide guidance for the energy complex and consequently a sharp advance in the equities easily supported another rally in crude. A weakening in the US dollar was also a supportive catalyst and there's no sign momentarily of any significant impact from the increasingly bearish oil fundamentals. Any potential decline in crude looks rather to be triggered by a sell off in stocks and/or a strengthening in the greenback. ;

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9 day moving average - $51.46

14 day moving average - $50.48

40 day moving average - $50.05

Technical Report:

The recent rally in crude continued yesterday with another 1.33 dollars gain. Reaching an intraday high of $54.60 means the upside target at $54.75 (upper limit of the current ‘locking' range and the high of 2009) is very much on the cards to be challenge soon. A breakout will confirm the current upside trend but any failure to breach that level could easily be followed by a trip south towards the moving averages. As we mentioned in the previous ‘Oil Report' the moving averages have started to point higher with the 9 day M.A. crossing above the rest. ;

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

WTI:

Support: $52.56 (yesterday's low)/Resistance: $55.30;(high of 24/11/08)

Support: $51.46 (9 day moving average)/ Resistance: $54.75;(high of 26/03/09)

Support: $50.48 (14 day moving average)/Resistance: $54.60;(yesterday's high)

OIL (BRENT):

Support: $52.36 (yesterday's low)/ Resistance: $55.92 (high of 12/11/08)

Support: $51.33 (14 day moving average)/Resistance: $54.90 (high of 28/11/08)

Support:$51.05 (9 day moving average)/ Resistance: $54.78 (yesterday's high)