Ashish Nayak's  Instablog

Is Crude Oil Short Term toward 87.22 or 94.18 …..?

WTI for April delivery was at $90.28 a barrel, down 41 cent, in electronic trading on the New York Mercantile Exchange West Texas Intermediate crude traded near the lowest level in 10 weeks after a report showed money managers cut their bets prices will rise. Libya halted some oil production and natural gas shipments amid fighting. Crude oil opens at 90.78 and now trading near day low 90.28.

Crude Oil Monthly Average Production

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U.S. crude oil production exceeded an average 7 million barrels per day (bbl/d) in November and December 2012, the highest volume since December 1992. The end-of-year data were reported on February 27 in EIA's Petroleum Supply Monthly. Initial estimates for production in November were below 7 million bbl/d, but revisions based on additional data indicate that production exceeded 7 million bbl/d in November 2012. That was followed by December production estimated to be more than 7 million bbl/d. Increasing oil production in North Dakota and onshore Texas drove the increase in U.S. crude oil production over the last several months (although crude oil production in North Dakota took a dip in November, before increasing again in December). Much of the increase in crude oil production is coming from shale and other tigh (very low permeablity) formations.

* WTI Crude Oil Short Term Technical Outlook

Crude oil 8 Month Technical Chart

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US crude oil trading below 200 days SMA 90.42. WTI crude oil created monthly reduction $6.7 on February end its noticeable that US crude oil range is from 90 to 99 from last two months. NYMEX crude oil creates on monthly chart a format of descending triangle in the beginning of an down trend who gives a sign of selling at every high below near main resistance 91.79 in crude oil. You can see fast levels 92.74 and 94.18 If it crossing and giving close on 91.79 continues two days. You can see definite below level 88.80 with more selling pressure after breaking sankou span support 89.83. Fresh bullish trend just can be on $92.74 according to IC kinko hyo green cloud well! All the high levels will prove gammon below 92.74.

On 8 month chart crude oil creates a format of head and shoulders in an uptrend it indicate that crude may glide below 88.80 in short term if it not crossing near crucial resistance 91.01 in intraday. 91.01 is also chikou span on 8 month chart. You can see 94.18 above level if crude oil today close above 91.01. 8 month RSI near 32.83 it when macd below -0.114. Intraday traders sell crude oil around 90.77 for target 89.83 and 88.80 with strict SL 91.01. on 8 month chart new bearish cloud may start below 89.83.

*Intra Day Traders Should Follow The Levels Given Below:

-->Bullish Trend - 91.01 - 91.79 - 92.74 - 94.18

--> Bearish Trend - 89.83 - 89.36-88.80-88.07

Disclosure: I am short CRUD.