Saturday October 2, 2010 - 02:45:17 GMT
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Forex Hound - www.forexhound.com
Lower Inventory Turns Crude Oil Trend Up
A lower than expected weekly inventory report sent shorts
scurrying for cover while turning the main trend to up on the daily and weekly
crude oil charts. Also boosting oil prices were slightly better equity markets,
a weaker U.S. Dollar and strong manufacturing data from China.
Despite the weaker outlook for the U.S. economy,
momentum buyers drove prices to their highest levels in seven weeks. Earlier in
the week, prices were driven up on larger-than-expected drawdown in crude
inventories and surprise drops in gasoline and distillate stocks.
News that China
reported gains in the manufacturing sector eased concerns of a potential
economic slowdown helped underpin prices on Friday.
Technically, November crude oil changed its trend to up on
the daily and weekly charts with a move through a swing top at 78.86 and a
Fibonacci retracement level at 79.17.
Weekly downtrending Gann angle resistance is at 81.66 and
82.79 the week-ending October 8.
A shift from summer to fall blend fuels may have prompted
the drop in crude inventories this week. Things may return to normal this week,
possibly increasing inventories and weakening prices.
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