Crude Comment 26/05/09

Overview:

With the US and UK equity markets shut for national holidays the usual guidance for energy complex was limited yesterday. But despite some further weakening in the US dollar which seems to have entered a downward path lately crude declined. The move seemed to have been triggered by a statement from top International Monetary Fund official John Lipsky saying declines in oil prices are likely in the near terms due to demand / supply imbalances which sounded as a cruel reminder of the bearish fundamentals.

9 day moving average - $59.80 14 day moving average - $59.10 40 day moving average - $53.51

Technical Report:

The consolidation pattern in crude continued yesterday in a quiet trading session dominated by the same light volume experienced the day before. Initially it seemed that crude was trying to challenge the recent high of $62.25 on May 20 th but after reaching an intraday high of $62.13 the bears took over and pushed the oil price down. So overall crude lost 76 cents settling at $61.22 but the move was too timid to read much into it especially when the moving averages remain bullish.

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

WTI:

Support: $60.85 (yesterday's low) Resistance: $62.95 (high of 11/11/08)

Support: $60.48 (low of 22/05/09) Resistance: $62.25 (high of 20/05/09)

Support: $59.89 (low of 20/05/09) Resistance: $62.13 (yesterday's high)

OIL (BRENT):

Support: $59.85 (yesterday's low) Resistance: $62.38 (high of 06/11/08)

Support: $58.83 (low of 21/05/09) Resistance: $61.98 (high of 10/11/08)

Support: $57.69 (low of 19/05/09) Resistance: $61.16 (yesterday's high)