By Russell Glaser – The price of spot crude oil failed to breach the $80 resistance level yesterday. Following higher prices for the commodity the price fell sharply on poor economic data and a lack of a rally in equities.
Spot crude oil prices finished the day down at $77.18, after opening the day at $78.90. The price of spot crude oil reached as high as 79.65 before dropping. The commodity has not traded at this high of a price since June 21st. Traders have been targeting the $80 resistance level when the last failed attempt to break the price range occurred.
Yesterday’s release of disappointing U.S. consumer confidence numbers triggered the sell off in the commodity the moment that equity markets began to drop. The CB Consumer Confidence Index reported a weak reading of 50.4 on market expectations of 51.3.
U.S. stocks fell in step with the release and the Dow Jones Industrials Average finished up marginally higher by 0.12%.
Today traders will be eyeing the release of the weekly U.S. crude oil inventories report from the U.S. Energy Information Administration. This report will help identify a consistent trend of a short term drop in crude oil supplies. Previous reports have shown falling supplies in crude oil stocks as refineries have reduced output in light of the global economic slowdown.
Expectations are for a decrease of 1.4M barrels of crude oil. An output on par with economists’ forecasts may help push spot crude oil prices higher to the resistance line at $78.50.
Forex Market Analysis provided by Forex Yard.
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