Thursday March 06, 2008

Oil hits $105.97 record as dollar drops to all-time low

bloomberg.com :

Crude oil rose to $105.97 a barrel, the third day this week New York prices have reached a record, as the U.S. dollar fell to its lowest ever against the euro. Crude oil for April delivery rose to $105.97 a barrel on the New York Mercantile Exchange, the highest since futures began trading in 1983. Gold and copper also advanced to all-time highs as the sinking dollar made commodities priced in the U.S. currency cheaper.

The euro climbed to $1.5358, the highest level since the single currency's debut in 1999, as the European Central Bank held its key interest rate at a more than six-year high as the Federal Reserve keeps cutting its benchmark rate. Besides dollar-led buying, oil rose after Colombian rebels bombed the Transandino Pipeline yesterday, escalating a cross-border dispute with Ecuador.

The 13 members of OPEC, which supplies over 40% of the world's oil, decided at a meeting in Vienna yesterday to maintain quotas at 29.67 million barrels a day, on the grounds that supply and demand are balanced.

- Oil remains in record-setting mode, moving further into literally uncharted territory. At $105.97, it is 27% above its 200dma of $83.15 which puts it deep in overbought territory, and yet it remains overbought. That's what being in a bull market is all about - prices become overbought, and they stay overbought.

Since we are at record price levels, there are no absolutely chart precedents to talk about resistance levels. But if I have to make a call, I might be talking about $110, $125 and then $150. Support levels remain at $100, $95, $89 and $85, and in this kind of market you could probably ignore the last 2 or 3 of these.

See also :

1. OPEC keeps output steady in face of $100 oil
2. Gold and oil soar as inflation fears grow ($103.95 oil, $992 gold)
3. Crude oil reaches $103.05 record high on dollar drop, UK gas terminal fire

(2008-03-06 23:08:25 SGT) [Energy] Permalink

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