Wednesday May 14, 2008

Crude oil hits $126.98, extending record run to 7 days in a row

This article belongs to the NYMEX crude oil price records story arc.

money.ninemsn.com.au :

Crude oil came within touching distance of $127 a barrel on Tuesday [13 May 2008], extending its record-breaking run for a seventh session, while US petrol and heating oil prices also climbed to new highs. NYMEX June West Texas Intermediate hit a record $126.98.

news.bbc.co.uk :

Oil prices have hit a record just shy of $127 a barrel after Iran said it was studying a plan to cut crude output. President Mahmoud Ahmadinejad said a proposal to reduce Iran's crude output was being reviewed by experts. The report sent US light, sweet crude to a new high of $126.98. Analysts doubted whether Iran would actually cut output but the report sent jitters through oil trading floors. The commodity could hit $200 within the next six months.

A number of factors have combined to push oil on its recent record-breaking run. There have been supply disruptions in Iraq, Nigeria and the UK's North Sea, while there has also been strong underlying demand from China, which is buying crude to fuel its economic boom. At the same time, concerns about the US economy and a weak US dollar have made oil a more attractive investment.

- Whoa, so much for the "due for a correction" part that the so-called analysts have been saying only yesterday. Like I said, "it would be showing incredible strength, however, if it stays persistently above $120." And there you are, crude oil *is* showing incredible strength, snapping back from what seemed like an inevitable downward correction towards the $120 support level. All that it took was for Iran to wade onto the scene and start talking about *reducing* their oil output. This at a time when Bush & Co has been practically leaning on the Saudi's on *increasing* their oil output.

But what else would you have expected from the Iranians, who have been saying just 3 weeks earlier that oil was too cheap at $115 : Even at 115 dollars a barrel, oil is priced too low, Iranian President Mahmoud Ahmadinejad said in comments published on Saturday [19 Apr 2008] adding that the commodity "should find its real value". "Oil at 115 dollars a barrel in today's market is a deceiving figure, oil is a strategic commodity and should find its real value," the state broadcaster's website quoted Ahmadinejad as saying.

You know, I rather suspect that their target for "real value" is somewhere north of $300 per barrel. Not that I mind personally, in the long run, being long oil-related equities and all, but I have to say for now, WOULD YOU PEOPLE GIVE US A DAMNED BREAK?!!! Man! This is getting to be an impossible market to get into, with crude oil breaking records 5, and then 6, and now 7 trading days in a row and all. And this is not the first 7-day run either, we've already had another 7-day run back in mid-March. Yes, I *am* keeping track. And no, I am *not* going to buy into a market that is setting records every single day. I might be bullish on oil but I'm not that crazy as to be buying into a vertical 90-degree exponential take-off.

Alright, stay calm. Watch the technicals. Support levels are at $120, $110, $100 and $90 (yes I know - ha, ha). Resistance levels are at $150, $180, $200, $300 and over $400. Take your pick, but I will be buying in at support.

See also :

1. Crude oil pulls back after hitting $126.40, breaking records 6 days in a row
2. Crude oil caps record-breaking week by reaching $126.27 on NYMEX
3. Crude oil continues 5-day record-breaking run to reach $125.98
4. Crude oil continues record-breaking streak, hits $123.93 on NYMEX

(2008-05-14 12:49:49 SGT) [Energy] Permalink

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