Spot Crude Oil Trading Higher Towards Near Term Resistance Line
March 15th, 2010 Posted in Oil and Precious Metals
The push for higher spot crude oil prices showed both positive signs as well as some negative signals in Friday’s trading session after the commodity reached its highest price since the beginning of the year. Spot crude oil trading continues to push higher towards the $83.90 resistance line.
Spot crude oil prices are currently trading lower at $$80.75 after opening the day’s trading at $81.15. On Friday, spot crude oil rose to its highest price level in two months to $83.10 after U.S. retail sales surprised traders by posting a higher than expected result. This helped to boost confidence in the economy and a recovery in the consumer sector
However, the price rally was short lived following the release of the consumer confidence survey. The numbers disappointed investors, reducing their appetite for commodities in general. Following the release of the consumer confidence survey, crude oil prices fell sharply from the monthly high.
Because the U.S. economy is the largest oil consumer, a choppy economic recovery in the U.S. does not support higher spot crude oil prices. The price may find support elsewhere as crude oil demand overseas has not fallen dramatically, specifically in China.
The price of spot crude oil has continually pressed the resistance level of $80, but has been unable to penetrate this year’s price high of $83.90 set in early January. This may be due to an oversupply of crude oil available in the market. As refineries continue to reduce output and the global economic picture improves as was seen by the positive U.S. retail sales report, a breach of the resistance line will be made possible, with a future price target at the resistance level of $86.25.
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Tags: Forex Trading, Price Target, Resistance Line, spot crude oil, spot crude oil prices, spot crude oil trading
