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Daily Oil Prices

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Daily Oil Prices

Wed, Sep 9 2009, 09:04 GMT
by Anna Coulling

Master The Markets

With Labor Day now firmly behind us and with oil trading volumes returning to normal daily oil prices soared yesterday ending the trading session with a wide spread up bar which breached all three moving averages and ended the oil trading session deep into the consolidation area between $69 and $72 per barrel.  This came as no great surprise and indeed I have suggested that this may be the likely direction for oil prices this week given that last week the consecutive doji candles found some support from the 40 day moving average which has now provided the platform for this move higher.  Technically daily oil prices are now balanced in an interesting position once again on the daily oil chart and we need to consider the options carefully for any further rally this week.  The first point to note is that we have a series of descending highs in the short term starting from the 24th August with yesterday's candle possibly being the third step lower.   For this sequence to be broken we need to see a continuation of yesterday's strong upwards move with a break and hold above the $74.25 per barrel price which will then signal that oil prices are set to move even higher and to target the $75 per barrel price point once again.  The alternative scenario is that we see the price stall at this level and fail to break above the $72 per barrel upper band of  the consolidation level which would signal that the series of lower highs is suggesting a short term downwards trend.  The likelihood, given that we have broken above all three moving averages, is that we should see a move higher in due course and provided we see the various levels outlined above breached, then $75 per barrel and beyond should be achieved relatively quickly.

In the background, of course, we have the OPEC meeting which starts in Vienna today and the general view of oil analysts is that the oil cartel will maintain current production levels as they see no reason to reduce the oil supply given that daily oil prices are very close to their optimal short term target, which has always tended to be around the $70 to $75 per barrel price point.   Of all the OPEC countries Kuwait is one of the few which is currently adhering to its maximum output quota with the UAE following suit, but other member states have been less than stringent in their approach to meeting their output targets.  Overall OPEC's compliance has been sliding lower and now stands at around 69% with the major defaulters being Angola (no cuts) and Iran (5%), according to the International Energy Agency.  Owing to the Labor Day holiday the weekly oil stats are delayed until tomorrow when we will also have the monthly numbers as well.  Overall the WTI oil contract closed the oil trading session at $71.10, having opened at $71.27, reaching an intra day high of $71.79 with a trading volumes of just over 342k contracts.   Meanwhile the Brent oil contract opened yesterday's session at $66.79 reaching a high of $70.10 and closing the oil trading session at $69.42 on a volume of 146,816 oil futures contracts.

WTI Oil Contract:

Support:  69.87      Resistance:  72.26

Support:  66.43      Resistance:  68.92

Support:  62.12      Resistance: 65.88

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Published on  Wed, Sep 9 2009, 09:05 GMT