Crude Oil has breached the strong support at $88.30 yesterday. As alerted earlier, any breach with a sustained momentum below $88.30 may trigger a strong bearish trend for Crude Oil with a longer term target set towards $78.40. For the day, Crude oil below $88.57 will fall further to $86.41, $85 & then to a small support of $82.72. Crude Oil for July delivery traded at $87.42 a barrel, headed for the biggest monthly drop in more than three years on speculation Europe’s worsening debt crisis and a slowing U.S. economy will reduce fuel demand. Futures are trading 20% lower than their highest settlement this year since its peak close this year of $109.77 a barrel on Feb. 24, a technically calculated magnitude, commonly understood as a bear market. Crude Oil peaked in February on concern that tension with Iran will disrupt global supplies. Crude Oil prices are down 16% this month, set for the largest monthly drop since December 2008, and 11% lower this year.
On rises from $89.20, Crude Oil may face resistance at $93.70 & $96.85. Only a break above $97 will push Crude Oil to 101.20 & then to 104.50. Crude Oil will get highly bullish only on a break with strong momentum above $105 with focus on a target of $118.
Brent oil for July settlement decreased 0.3% to $103.20 a barrel on the London-based ICE Futures Europe exchange. Prices have dropped 14% this month, the most since May 2010. The countries using the euro accounted for about 12% of global oil demand in 2010 & U.S.accounted for about 21%. Oil may extend its decline in New York as the monthly moving average convergence-divergence indicator falls below its signal line, showing a loss of positive momentum.U.S.crude output rose 90,000 barrels a day to 6.24 million in the week ended May 18, the highest level since February 1999, Energy Department data showed last week. Oil production in the Organization of Petroleum Exporting Countries (OPEC) climbed 305,000 barrels to 31.405 million barrels a day in April, the most since October 2008, according to a Bloomberg survey. So-called long positions in crude, or wagers on rising prices, outnumbered short bets by 136,751 contracts in the week ended May 22 on the Nymex. That’s 12% higher than the average in U.S. Commodity Futures Trading Commission data compiled by Bloomberg going back to at least June 2006.
An Energy Department report today will likely show that supplies climbed 1 million barrels to 383.5 million last week, the most since 1990.U.S.oil stockpiles dropped 353,000 barrels to 385.9 million last week, according to the American Petroleum Institute.
Crude Oil Prices fell yesterday as the cost of protecting Spanish bonds against default climbed to a record yesterday and a Greek poll showed support for anti-austerity parties before elections. PendingU.S.home sales slid the most in a year in April, according to a report.