Frist day back after summer break (not that we have had any summer here in the UK as its still pouring with rain and freezing cold) the good news is that the oil price looks to have fallen off a cliff and we are now in serious danger of the price falling back below $100 dollars a barrel. This is despite the tensions between Russia and the West and hurricane Gustav, which has now been downgraded. A blessed relief to the citizens of Louisiana.
Significant price levels for oil are as follows:
Support: $109.17 (yesterday’s low) Resistance: $115.50 (yesterday’s high)
Support: $108.42 (low of 01/05/08) Resistance: $114.23 (9 day moving avg)
Support: $107.97 (high of 17/03/08) Resistance: $113.92 (14 day moving avg)
From these numbers expect some short term consolidation and bearish medium term. Longer term the picture is very uncertain given current dollar performance. We also have to take account of forthcoming US presidential election which is too close to call. As has been been mentioned in my currency blog a democratic win is usually perceived as dollar positive, whilst a win for the republicans usually results in dollar weakness.
Whatever happens in the next 8 weeks we can be sure it will continue to be bumpy but fascinating journey.