Crude Comment 09/07/09

Overview:

Yesterday's EIA report showed a bigger than expected build in gasoline stocks which trumped the larger draw in crude inventories and provided a catalyst for additional long liquidation. Notably the financial guidance wasn't dramatically bearish as there was only limited change in the US dollar and modest losses in the stock markets which reemphasized the current market sentiment(bearish). Some analysts were quick to point out the liquidation coming from institutional traders which probably adds extra pressure on crude prices.

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9 day moving average - $65.62 14 day moving average - $66.77 40 day moving average - $66.49

Technical Report:

The violent downtrend in crude saw another steep decline taking the market price to an intraday low of $60.01. Although failure to breach below the 60.00 mark brought additional buying power which eventually pushed crude back to $60.50 in late session, overall oil dropped another $1.68 or 3% to a level last seen on May 26 th . As expected the 9 and 14 day moving averages crossed each other but the fact that there's some distance between crude price and these indicators could also indicate a potential short term rebound.

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

WTI:

Support: $60.01 (yesterday's low) Resistance: $64.89 (high of 07/07/09)

Support: $59.52 (low of 26/05/09) Resistance: $63.81 (high of 27/05/09)

Support: $58.93 (low of 19/05/09) Resistance: $62.67 (yesterday's high)

OIL (BRENT):                                                                                                                                                                                                                

Support: $60.30 (yesterday's low) Resistance: $64.89 (high of 07/07/09)

Support: $59.85 (low of 25/05/09) Resistance: $64.68 (high of 28/05/09)

Support: $58.83 (low of 21/05/09) Resistance: $63.13 (yesterday's high)

DOE Stock Figures (change in millions of barrels)

Crude -2.9 (-1.9) Distillates +3.7 (+1.7) Gasoline +1.9 (+0.8)