Crude Oil Testing Resistance After Bullish Inventory Data

Commodities - Energy

Crude Oil Testing Resistance After Bullish Inventory Data

Crude Oil (WTI)         $74.34          -$0.27        -0.36%
Crude oil surged on Thursday amid a bullish inventory data and nagging concerns related to Gulf of Mexico production. Interestingly, prices actually went into the red with less than half an hour before the settle, but then surged in the final minutes, finishing the session up $1.75, or 2.4%.

The EIA inventory data was unequivocally bullish (EIA: Crude -1902K, Gasoline -2647K, Distillate +445K, Total Petroleum -2264K versus 5-Year Average: Crude -754K, Gasoline +1451K, Distillate +1770K, Total Petroleum +5045K). U.S. inventories are now 6.8% above the five-year average, down from 7.6% last week.

A Washington Post report stating that the Interior Department had extended the drilling moratorium to shallow water areas of the Gulf was another supportive factor for crude on Thursday. Although the department later denied the report, there is still a lot of concern regarding Gulf oil production—the vast majority of which comes from deepwater areas where the drilling ban is in full effect.

On the technical front, oil prices are again flirting with $75.00 resistance. If the bullish factors outlined above lead to a break out, look for $78.50 and $80.00 as the next levels of resistance. On the downside, $71.68 and $69.50 provide support.



                                                                                                                                                                                                    

Commodities - Metals

Gold and Silver Trapped in a Narrow Range

Gold $1206.45          -$0.20        -0.02%
Gold pulled back 1.37% on Thursday as stability in equity markets offset weakness in the Euro. Barring continued turmoil in broader financial markets, gold will probably continue to consolidate between $1166 and $1250. Prices look poised to test trendline support; look for a possible move toward the $1195 level in the coming days.

Silver $17.94          -$0.03        -0.17%
Silver lost over 2% in the prior session and is currently down again. Prices have fallen for four straight sessions after failing to break $18.50 resistance. We see limited upside in silver prices in the near-term. Resistance remains $18.50 and the next level of support is the recent low near $17.38.


                                                                                                                                                                                                        

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