DAILY OIL PRICE ANALYSIS 16 MARCH 2010

Daily oil prices have continued to struggle to break above the $82.50 per barrel price point with Friday’s candle once again signalling weakness which was duly validated yesterday’s, as crude oil closed the trading session below the 9 and 14 day moving averages once again. Given the recent trend of sideways price action in the current channel between $70 per barrel and $82.50 per barrel there are two scenarios that may unfold.  The first of these is that we see a continuation of the reversal of Friday with oil prices declining as occurred in early January to re-test support in the $70 per barrel price region providing us with longer term swing trading opportunities.  The second scenario only occurs should we see a break and hold above $82.50 which would then signal some sustained momentum to the upside, supported by the deep and wide price platform below.  Meanwhile OPEC members have signalled their satisfaction that oil prices are trading at around the $80 price handle as this allows most of their members to meet their budgetary requirements.  However, this unified front does hide some underlying tensions as not all OPEC members appear to be adhering to their production quotas and trying to increase their market share.  Overall the WTI contract ended the session at $79.89 having traded between a high of $81.31 and low of $79.13.