Commodity Daily News

Crude Prices Rise on Positive Inventory Report

The price of spot crude oil was boosted yesterday after US weekly crude inventories showed sharp declines. Spot crude oil prices rose despite large gains for the dollar.

Yesterday the US Energy Information Administration released data showing crude oil inventories plummeted by 9.9M barrels in the previous week. Expectations were for a decline of only 2.7M barrels.

Spot crude oil ended the day up at $88.60 after opening the day at $87.92.

The gains in spot crude oil come despite a strong performance by the dollar in yesterday's trading. The dollar rose versus the major currencies, especially the euro. Commodity prices typically have an inverse relationship with the dollar; as the dollar rises, oil prices tend to fall.

A bullish flag pattern appears on the daily chart with the recent price being contained by two downward sloping resistance and support lines above and below the price action beginning on December 6th. Traders may want to wait for a breakout above the resistance line and go long. The pattern shows a potential price appreciation of $6 to the $95 level.