The Energy Space
Energy Price Outlook
Oil prices may hold within a sideways trading direction this week, as the short-term rally contends with a building bearish divergence on the daily stochastics oscillator. Near-term support may come from weakness in the dollar, yesterday's assurance of accommodative Fed policy from Chairman Bernanke, and from expectations of improving economic data (housing and Philadelphia Fed on Thu). There's a growing potential for pressure, however, from a bearish divergence on the stochastics oscillator, weakness in oil demand, and the prospects for supply growth to outpace that of demand. Saudi Arabia may also add pressure after the country assured oil supplies in a statement yesterday. If the growing divergence can pressure WTI, we'd look for a rebound after a test of the $91.50 level as well as a narrowing of the Brent-WTI spread. We favor holding our June WTI-Brent trade entered on Jan 4th at -$14.25 with a target at -$8.00....2108 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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