Home Sales Numbers Fail to Weaken Spot Crude Oil Prices

January 5th, 2010 Posted in Oil and Precious Metals

Name: Russell Glaser

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Spot Crude Oil prices finally showed signs of slowing after the last 20 day bullish run. Weak U.S. Pending Home Sales numbers were low enough to weigh on the commodity, but not by much. The commodity is currently trading near its opening price despite heavy volatility today.

The price for spot crude is now trading only $0.10 off the opening price today after reaching as high $81.96; the highest price spot crude oil has traded in three months. Currently the price is sitting at a major resistance level near $82 and some analysts predict a significant breach in the near future.

Despite the lower than expected housing numbers from today, the price of crude was relatively unchanged. This may show heavy buying pressure, driving the price higher.

A combination of cold weather in the U.S. and an improving global economy has crude oil trending higher. The start of the new year has new money coming into the market. Those who closed positions in order to book year end gains are now buying again, bidding up the price.

Tomorrow will bring the release of the weekly crude oil inventory numbers from the Energy Information Agency. The forecasted reading for the economic indicator is expected to be a decline of 0.4M barrels for the previous week. A drawdown greater than the expected result could result in spot crude oil prices cracking the $82 resistance line in tomorrow’s trading.

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