Oil rout deepest in 16 yrs

Oil prices have fallen as much as $16 from their peaks, their steepest reversal in 16 years, in a correction that traders say may be harder to shake off than past setbacks over the market's four-year rally. Technical analysts who study past price action for future direction, say the drop through the 200-day moving average last week and this week's fall below a three-year trend line - intact since mid-2003 - both send worrying signals.

U.S. crude has dropped nearly $15 to hit a near six-month low of $63.53 a barrel on Wednesday, a fall only a hair smaller than those in August-November 2005 and October-December 2004. In those cases, oil recovered to make new highs within five and eight months, respectively.

While many analysts say the worst may not be over yet in the latest shake-out, most also agree that there remains scope for another attempt at surpassing the previous summit. "If the fall is fast enough and hard enough, then there's momentum selling on the other side - that can have a sustained influence on prices, weeks or months," says Tobin Gorey, commodities strategist at the Commonwealth Bank of Australia. "I do think this dip could well outdo those last two falls, but I don't think it destroys the story."

Post a Comment:

Comments are closed for this entry.

« Canadian crude oil... | Main | OPEC: High and volat... »

Most popular blog postings on lowem.log :

1. 2010 Nissan Leaf electric car specifications : 107hp, 24KWh lithium-ion batteries, 100-mile range
2. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
3. 2010 Honda Civic Hybrid preliminary specifications released
4. Singapore SIBOR rate falls to 0.69% in Jan 2009, lowest since Apr 2004
5. How to insert currency exchange rates into Google Spreadsheets
6. Singapore : Nuclear power not ruled out
7. Live spot gold price quotes chart on COMEX
8. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option

Featured articles on lowem.log :

1. 2010 Honda Civic Hybrid preliminary specifications released
2. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
3. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
4. Honda, GS Yuasa JV to make lithium-ion batteries for 2010/2011 Honda Civic Hybrid
5. New efficient nanotech materials may boost enhanced geothermal power systems
6. NYMEX crude oil recovers from $32.40 low after 2.2 mbpd OPEC production cut announced
7. Singapore property market recovery seen as private home sales surge 52% in Jul 2009
8. Singapore SIBOR rate falls to 0.69% in Jan 2009, lowest since Apr 2004

Custom Search