After pushing strongly above $82 yesterday morning, crude oil turned around and sank to close at $81.47. $82 is the line in the sand — if oil can close above that, it could be on its way to $91.5o. So, this pullback is a real disappointment for the bulls.
Oil could make another attempt next week, or it could travel back to the bottom of that ascending triangle and test support there.
Why did oil go lower on Friday? Market watchers blamed a dip in the University of Michigan consumer sentiment index, which declined to 72.5 in March from 73.6 in February. Economists had been expecting the sentiment index to hit 74 in March.
However, this news came out on the same day that U.S. retail sales increased 0.3% to a seasonally-adjusted $355.5 billion in February, despite three major snow storms in the East. That should have been good news, especially because expectations were for a DECREASE of 0.3%.
I think oil pulled back for the simple reason that everyone had already bought into it. The early movers were looking for any excuse to take profits.
But the long-term outlook is pretty darned bullish. Especially when the International Energy Agency says China’s demand for oil is “astonishing”. China’s oil demand jumped 28% in January compared to a year earlier. Wow!
Related Posts
- Thursday Charts — Crude Oil and More (05/14/09)
- Take Another Look at Crude Oil (02/22/10)
- Crude Oil Turns Bullish (06/16/10)
- Crude Oil Chart — $82 or Bust! (12/29/09)
- Are Copper and Crude Poised to Surge? (06/03/10)
{ 0 comments… add one now }