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WTI is positive – The rest are less convincing

Published Thursday, May 8th, 2014

If someone were holding a gun to my hand and forced me to take a position this morning in the oil market I would probably be long in WTI and short in the rest. Every contract staged an impressive rally yesterday but it is really only the NYMEX crude contract that is unreservedly positive whilst the others have some hard work to do to catch up with it. WTI closed right on the 13-day M/A yesterday and it is above it this morning suggesting that there is more to come on the upside. This positive view will be confirmed on a conclusive close over the 34-day M/As; the contract is at 100.84 and the continuation is around 101.34. Should the higher of them be settled above the 102.20 range resistance will be shortly in sight. The bullish edge will only be taken off this contract if the 8 and 5-day M/As at 100.08/05 are settled below. As for the rest as encouraging as yesterday’s move up was there are some hefty resistances above the current price levels that need to be overcome to become bullish. In other words the buying spree came after quite a few days of weakness and therefore it is viewed as an upside correction in an otherwise down-trending market, hence the gently negative view on these four contracts.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.