Crude bulls posted a new yearly high on Friday as WTI rocketed higher in the previous two sessions after Wednesday’s more bullish-than-expected DOE inventory release. More bullish?? Or less bearish might be more like it. Since making multi-year lows on March 18, WTI crude has seen a healthy 42% rebound. Likewise, Brent crude has rallied nearly 49% since putting in the low for the year on January 13. And we all know gasoline prices have been going up at the pump.
Now that crude oil has rallied close to levels most analysts thought we would see later in 2015; it might be time for a reality check for crude bulls in that the market may have gotten a little ahead of itself. After posting higher highs and higher lows for seven weeks since printing at $42.03/bbl, a lack of bullish news on Monday failed to ignite the buying frenzy atmosphere WTI bulls have been accustomed to of late. Instead, it was announced on Monday that the Chinese PMI in April was the weakest in over a year. Libyan exports are expected to rise in May, exports out of Iraq are increasing, and the Saudis are considering pausing the airstrikes in Yemen. Furthermore, data provider Genscape Inc. announced Monday that Crude supplies in Cushing fell less than 100k barrels in the week ending Friday.
While it is still early in the week, and a continuation of the run is still quite feasible, the $60/bbl round has been tested and is looming overhead. This might prove formidable resistance for the bulls—failure to push through this level could create a bull stampede to the sidelines. After a near $18 move higher since March 18, a correction could get ugly. For Tuesday, support for WTI can be found at 5833, 5775, and 5647, and resistance at 5961, 6031, and 6159. Brent traders will see support at 6592, 6539, and 6431 and resistance at 6700,
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