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Further downside pressure is expected

Published Tuesday, January 13th, 2015

Those who hoped for some kind of upside correction yesterday were disappointed and badly bruised as the market continued its ruthless march downwards. Not only did the contracts lose significant value but they have kept falling this morning. Targets were hit on all contracts bar RBOB if not yesterday then this morning. These targets have been broken below, greenlighting the next objectives on the downside. Basically, the very long-term trendlines starting at the 1998 lows were the supports to watch yesterday. These are 45.95 on WTI, 48.18 on Brent and 164.32 on Heating Oil. RBOB had a range support at 129.36 and Gasoil at 463.50. All of these levels are now above the current price action therefore the sentiment remains firmly bearish and the next set of supports are expected to be in sight shortly. These objectives are the assorted correction points of the 1998-2006 rallies and are as follows: 44.38 on WTI (please note that this contract got extremely close to its support this morning), 44.10 on Brent, 147.73 on Heating Oil, 117.83 on RBOB and 451.50 on Gasoil.

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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.