Price of Crude Oil August futures contract pulled back

Since early of this year price of Light Crude Oil futures (CLC1) price have been bullish from about $90 to the recent resistance level of $145. The steep rising price have caused anxiousness not only among investors but also to general public. The fear of rising inflation, which may envetually cause the government central banks to increase the interest rates, is not equity market friendly.

The price of CLC1 is now at the up trend line support level (See chart below) after trying to break above the $145 resistance level but failed. A technical rebound is expected when price nears the support level. But in this case, the price of CLC1 may just drift sideways because momentum indicators are indicating a weak momentum on the upward trend.


Light Crude Oil August Futures Contract as at 16 July 2008, using NextVIEW Advisor

The CLC1 price is expected to trade sideways in a price range of $130 and $145. If price breaks below $130 we may anticipate a bigger correction. If price breaks above $145, we me see price hitting $157 in the near term.

Article by Benny Lee