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WTI touches a fresh 6-year low

Published Thursday, January 29th, 2015

The contracts are not singing from the same hymn sheet. Although they all lost value yesterday mainly due to the weekly statistics from the EIA on US oil inventories, RBOB remains more on the positive side, WTI and Heating Oil are slightly bearish whilst the ICE contracts are undecided. It is definitely not recommended to think about going long on WTI as all of its daily short-term M/As are above the price action. They are between 45.81 and 46.50. The highest of them, the 13-day, is very close to the 46.40 range therefore only a close over this area is a buy. Should such an unlikely rally take place the 34-day M/A at around 51.57, together with the 51.73 range resistance, will be green-lighted as the nearest serious objective on the upside. The recent low and the monthly c/p at 44.35 and the long-term trendline at 44.20 were seriously tested but they held by the close. A close below them is bearish and should push the price of this contract down to 40.25, a weekly low and potentially to 36.33, another monthly c/p. On Brent the daily M/As, between 48.65/78, are losing importance due to the range-bound nature of the contract. On the downside a close below the low of 46.40 is a sell for a further weakness to 44.09, the monthly c/p.

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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.