Oil Outlook(31-Jan-2012)

Oil Trend! 31-01-2012
Technical

Yesterday, crude oil witnessed a decline of 0.70$ to close at 98.84$. With the current decline, oil has fallen below the 14-DMA and the 50-DMA which will now provide resistance around 99.5$. If the decline extends further, the initial target will be at 97.4$. Furthermore, the RSI has shown weakness and the Stochastic Oscillator has continued to move down suggesting lower price movement in the near term.I  therefore suggested to stay sellers on the break of 99.30. The support and resistance are present at 98.25$ and 99.84$,respectively.

Fundamental 

Oil rose as investors speculated that fuel demand may climb after industrial output in Japan gained more than forecast. Japanese factory production climbed 4% last month. Greek Prime Minister said progress was made in debt-swap talks with bondholders after a European Union summit. Iran has threatened to cut off oil shipment to EU countries ahead of a planned embargo.

By

M.Zohaib Gadit

Forex Trading Consultant