Wednesday October 6, 2010 - 03:57:58 GMT
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U.S. Dollar Sell-off Sends Crude Oil to Five-Month High
November Crude Oil futures surged to a five-month high
Tuesday, in a move triggered by a weaker U.S. Dollar, stronger stocks and
speculation the Fed will provide more liquidity to the economy.
The close at $82.82 a barrel was the highest since May and
put the market in a position to challenge the August 4 top at $83.91. An
uptrending Gann angle that has been providing support for the past 9 days is at
$82.58 on Wednesday. The market could weaken following a close under this
Based on the main range of $93.14 to $70.96, the major
upside target is $82.05 to $84.67. The market crossed to the bullish side of
the 50% level at $82.05, setting its sights on the Fibonacci level at $84.67.
The market is expected to continue to rise as long as the
Fed keeps quantitative easing on the table, stocks remain firm and the Dollar
continues to plunge. A couple of weeks ago it looked as if the Dollar had
decoupled from the Euro, but it looks like they are moving in tandem once
Traders will be watching the weekly inventory report on
Wednesday. Last week this report launched a rally because it showed a surprise
decline in barrel stocks. This may have been because of the shift from summer
fuels to fall fuels.
Analysts polled by Platts expect a decline of 1.3 million
barrels in U.S.
oil inventories. Gasoline stocks are seen rising 700,000 barrels on the week,
while reserves of distillates are forecast to decrease 900,000 barrels.
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