Overview:

An additional decline in the equity markets combined with some related strengthening in the US currency were again the main drivers behind the sharp sell off in crude last Friday. However, in percentage terms crude prices dropped significantly more which could suggest a few extra factors coming into spotlight: speculative interest in oil has been quelled especially after talks of trading limits and investors appearing to refocus on fundamentals. So no surprise that crude's appeal as an inflation hedge is slowly starting to fade away for now.

 

9 day moving average - $63.02 14 day moving average - $65.53 40 day moving average - $66.57

Technical Report:

True to its current form, crude remained under pressure on Friday touching an intraday low $58.72 which again represents a fresh recent low last seen on May 18th. Dropping below the $60.00 mark attracted some bargain hunters like in the previous trading session but with the exception that this time the additional buying power wasn't strong enough to see a close above the aforementioned level. This whopping steep decline is reaffirmed by the chart indicating a string of 9 consecutive sessions of lower highs and lower lows which is a new feature for 2009.

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

WTI:

Support: $58.72 (Friday's low) Resistance: $62.67 (high of 08/07/09)

Support: $57.80 (low of 12/05/09) Resistance: $61.66 (high of 09/07/09)

Support: $57.40 (low of 13/05/09) Resistance: $60.82 (Friday's high)

OIL (BRENT):

Support: $59.53 (Friday's low) Resistance: $63.13 (high of 08/07/09)

Support: $58.83 (low of 21/05/09) Resistance: $62.17 (high of 09/07/09)

Support: $58.41 (low of 26/05/09) Resistance: $61.44 (Friday's high)

** The ODL Brent crude oil contract (Oil) trades between 07:15 and 21:00 UK Time **

** The ODL WTI crude oil contract (WTI) trades between 01:15 and 22:00 UK Time **

** The ODL Gas Oil contract (GSO) trades between 07:15 and 21:00 UK time **

The ODL oil contracts are based on the front month (August) of the ICE contracts:

Yesterday's Settlements Oil: August - $60.52 September - $60.66

Yesterday's Settlements WTI: August - $59.89 September - $60.88

The ODL oil contracts roll monthly on the day before the ICE Brent front month expiry on the settlement of the front spread

Next rollover: 15/07/2009