Crude futures have just breached their psychological $80/bbl level in reaction to weekly inventories coming in -1.7 million bbl below analyst expectations. Since the Dollar and U.S. equities are consolidating right now, today's positive performance from crude appears to stem directly from the -0.9 million bbl decrease in inventories this week. However, the $80/bbl area has proven to be a tough trading zone over the past month. Therefore, crude futures could have trouble getting beyond October highs should neither U.S. equities nor the Dollar work in crude's favor. As a result, investors should continue to monitor the EUR/USD's interaction with 1.50 and the S&P's behavior towards 1100. A topside breakout in either could help crude add on to present gains due to their positive correlations.

Technically speaking, crude still faces topside barriers in the form of 2nd tier downtrend line along with the psychological $80/bbl level and previous November/October highs. As for the downside, crude has our 1st and 2nd tier uptrend lines serving as technical cushions along with 11/17 and 11/13 lows. Furthermore, the psychological $75/bbl level could work in crude's favor should it be tested.

Price: $80.10/bbl

Resistances: $78.62/bbl, $79.15/bbl, $79.55/bbl, $80.02/bbl, $80.45/bbl, $81.01/bbl

Supports: $77.85/bbl, $77.34/bbl, $77.03/bbl, $76.54/bbl, $75.54/bbl

Psychological: 2009 highs, $75/bbl, $80/bbl

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