Sunday October 18, 2009

NYMEX crude oil prices rise above $78 on Nigeria crisis, US economic recovery

channelnewsasia.com :

NYMEX crude oil prices rose for a 7th straight session on Friday [16 Oct 2009], fuelled by a jump in industrial production in the US and rising tensions in Nigeria. Light sweet crude for Nov 2009 delivery reached $78.67, the highest since Oct 2008. Oil prices ended the week at $78.53. The NYMEX crude oil futures contract has gained more than $9 or almost 13% during its 7 days of rise. Oil prices had tumbled from historic record highs of $147.27 in Jul 2008 because of the global recession and fell to $32.40 in Dec 2008.

US manufacturing output in 2009 Q3 advanced at an annual rate of 5.2%, the first quarterly gain since 2008 Q1. US gasoline stocks fell 5.2 million barrels, a surprise drop indicating rising demand fuelled by hopes of economic recovery. Warnings by the MEND rebel group in Nigeria of a resumption of an "oil war", ending a 90-day ceasefire, also rattled the market. MEND's attacks have severely cut daily crude oil production in Nigeria, the world's 8th largest oil exporter.

- The critical NYMEX $75 resistance level mentioned earlier has now been convincingly cracked if not outright shattered. But oil bulls should not celebrate just yet since technically speaking, things are getting stretched quite a bit with oil prices heading into overbought territory. Watch out for a re-test of the $75 level but now as support instead of resistance. The oil bears would be darned if it breaks the next resistance level at $80 without so much as looking back, but to me, another likely scenario looks like a possible consolidation phase between $75-80.

And now that we have mentioned oil bears, it might be worth the while for the peakoiler community to observe yet another "achievement", that is once we passed $76 we have reached 2 Yergins, a Yergin unit being $38 as mentioned here. The oil bulls, who also happen to be of the peakoiler variety, eagerly await the next milestone, a Triple Yergin, which would be reached at $114 oil.

See also :

1. NYMEX crude oil prices fall under $70 after China stock plunge
2. NYMEX crude oil prices fall to $65 on home sales drop, economic recovery doubts
3. NYMEX crude oil prices rise sharply back to $70 on economic recovery signs
4. NYMEX crude oil prices soar above $72 on economic recovery, euro rally

(2009-10-18 10:36:05 SGT) [Energy] Permalink

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