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Test of supports whilst below the M/As

Published Thursday, October 23rd, 2014

The market was not bullish yesterday but it would have been had the 5 and 8-day M/As held and the 13-day M/As been closed over. As it turned out it was not the case as disappointing statistics from the EIA on US oil inventories changed the sentiment and sent the contracts much lower. Whether this sentiment prevails remains to be seen but the fact of the matter is that all the daily short-term M/As were settled below with the exception of Gasoil due to its early close but even this contract has moved below these supports this morning. Whilst the 5 and 8-day M/A are above the price action the odds are on a test of the recent lows and on the long-term, monthly correction point supports. RBOB has already done so as it hit a low of 213.70 this morning with its recent low at 213.73 and its monthly c/p support at 213.24. A close below the latter is very bearish whilst only a rally and close above the 8 and 5-day (218.60/219.09) will take the bearish edge off of this contract.

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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.