Monday, October 4, 2010
Bloomberg Analysis: Crude Oil to Hit Resistance Level at $86.70 This Week
Oil prices have jumped 4.7 percent since Sept. 29 to $81.53 today as signs of positive economic growth in the U.S. and China improve the outlook for fuel demand. Crude’s gains may sputter to a halt as prices climb to highs reached earlier this year in April and May. “Prices will hit serious resistance in any attempt to cross the $86.70 barrier,” said Schork Group President Stephen Schork. Oil climbed to this year’s highest close at $86.84 on April 6 and reached $86.19 on May 3, followed by sell offs below $70, he said.
The November contract was at $81.52 a barrel, down 6 cents, in electronic trading on the New York Mercantile Exchange at 11:54 a.m. Singapore time after reaching $81.87. It surged $1.61 to settle at $81.58 on Oct. 1, the highest close since Aug. 5, capping the biggest weekly gain since February. “The bulls should have enough momentum to hold prices close to either side of the $80 barrier, thus we expect prices to trade safely inside our confidence interval,” the Schork Group said.
Reporter Christian Schmollinger can be contacted at firstname.lastname@example.org.
Courtesy Bloomberg News
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