By Russell Glaser – Spot crude oil prices managed to hold onto gains yesterday and continue to add to them despite fiscal problems in Europe. The rise in price comes after yesterday’s heavy price volatility and weakness in equities that drove the price of spot crude oil tentatively lower to a significant support line.
Spot crude oil is currently trading at $70.50, up from an opening day price of $69.69. Yesterday the price fell to a low of $67.13, close to a significant technical support level at $67.00.
Driving prices lower at the beginning of the day was a drop in equities and increasing tensions on the North Korean Peninsula. This helped to strengthen the dollar and yen, two currencies that typically appreciate during times of low risk taking.
The Dow Jones Industrials was significantly lower by almost 300 points at the beginning of the New York trading session, but the Dow came back with a 200 point rally following the release of a better than expected U.S. consumer confidence. The rebound in stocks had a positive affect on spot crude oil trading and helped to pull spot crude oil prices off their daily lows.
Spot crude oil traders will be looking for an excuse to bid up spot crude oil prices, and this may come from today’s release of the U.S. Core Durable Goods Orders. Positive numbers from the U.S. economy, along with an improvement in global equities could send spot crude oil prices towards the next resistance level of $72.50. Should prices fail to rally, the next support line rests just below $69.00.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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