Crude Comment 12/05/09

Overview:

Given that crude was in negative territory for most of the day its overall performance yesterday appeared well supported in the face of a strengthening in the US dollar combined with a decline in the equity markets. Although the OPEC meeting is drawing nearer its impact on the energy complex is expected to be rather limited. So currently any fundamental shifts in crude are likely to be easily overshadowed by broader financial developments which in turn could trigger significant moves on either side in stocks or currencies.

9 day moving average - $55.53 14 day moving average - $53.65 40 day moving average - $51.62

Technical Report:

Initially crude went down yesterday touching an intraday low of $56.80 as market participants decided to play safe and book some profits after enjoying a rally of over 9 dollars in the last 8 days. However towards the closing crude reversed its fortune and finished the day 20 cents higher possibly on investors realising the market is too oversold with the moving averages remaining firmly bullish. A retest of the $58.57 - $58.73 area (last few days highs)which has proved strong resistance is still on the cards although further consolidation should also be considered.

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

WTI:

Support: $56.80 (yesterday's low) Resistance: $59.65 (high of 13/11/08)

Support: $55.42 (low of 07/05/09) Resistance: $58.95 (high of 17/11/08)

Support: $54.58 (low of 13/11/08) Resistance: $58.63 (yesterday's high)

OIL (BRENT):

Support: $56.31 (yesterday's low) Resistance: $59.43 (high of 07/11/08)

Support: $55.43 (low of 07/05/09) Resistance: $58.59 (high of 11/11/08)

Support: $53.86 (low of 06/05/09) Resistance: $58.09 (yesterday's high)