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Crude Oil Market Analysis

June crude oil prices had a gap higher open Thursday evening and have tracked higher during the early morning hours. Some of the early morning support appears to be coming from a rebound in global equity markets, ideas that China could ease monetary policy as soon as this weekend and better than expected German confidence data. The positive risk-on vibe is seen as a positive for June crude oil prices early this morning. There’s also talk that Brent crude oil might have become oversold during the latest decline at the same time that a number of countries reduce purchases of Iranian crude oil. This could be a situation that produces a tighter supply backdrop once refineries in the North Sea region come back on line after maintenance. However, lingering concerns over the European debt situation and a dose of soft US economic data are forces weighting on global crude oil demand The price action in June crude oil turned negative with the recent two-day break, with resistance coming in at $105.50. Yesterday’s late day sell off breeched $102.28 support but was unable to hold that level, suggesting that the near term decline in prices might have run its course. The bulls get the early nod this morning, with upside targeting at $104.70.

Technical Analysis

CRUDE OIL (JUN): Stochastics are at mid-range but trending higher, which should reinforce a move higher if resistance levels are taken out. A negative signal for trend short-term was given on a close under the 9-bar moving average. It is a slightly negative indicator that the close was under the swing pivot. The near-term upside target is at 104.45. The next area of resistance is around 103.71 and 104.45, while 1st support hits today at 102.19 and below there at 101.40.

 

StockMarketNews Research Team

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