October 25, 2009
Crude oil has breached a key resistance level of $US76.28 a barrel, giving it the "capacity" to rise to just under $US90 based on Fibonacci retracements, ANZ analysts said.
Oil, which is trading near a one-year high in New York, is "taking a pause" to consolidate before moving up toward $US89.85 a barrel, said Geoff Clear, the Singapore-based head of Asian commodities at ANZ.
"We saw a break above $US76.28 a barrel - that was the big `break up' level," Clear said. "We're in a new range."
Crude prices have surged 83 per cent since March 5 while the Dollar Index, which tracks the currency against those of six major U.S. trading partners, has fallen 16 per cent since then. The sliding US dollar and a recovery in equity markets prompted investors to buy commodities as an inflation hedge.
Crude may encounter its next resistance level at $US83.60, according to Clear.
"If we start to get close to the $US83.60 level, it's the next targeted Fibonacci retracement that I can see in the market," Clear said. "Prices will do a bit of work below $US83.60 initially, and then we'll go on from there."
Crude oil for November delivery was at $US79.75 a barrel, up 14 cents, in electronic trading on the New York Mercantile Exchange at 9:43 a.m. Singapore time. Prices settled at $US79.61 yesterday, the highest close since Oct. 13, 2008.
The November contract expires today. The more actively traded December contract was at $US80.06 a barrel, up 10 cents in Singapore.