Last week, crude oil for November delivery slumped to a low of $74.95 per barrel and subsequently found a base before heading higher. Tuesday‘s close below $76 a barrel was the lowest it has been in over a year. However, the subsequent days saw oil managing to recoup all the week‘s losses. This followed two weeks of consecutive losses with some analysts calling a double – bottom to the black gold, however, other analysts advise caution as WTI crude oil is seen as bearish while under the former Feb 2009 support line and the May 2 resistance line. The mid – week bounce was spurred by a bullish US inventories report and Friday saw better than expected data help fuel oil‘s bullish boost.
Crude for November delivery added 39 cents, or 0.5%, to $82.98 a barrel on the New York Mercantile Exchange. On the week, oil gained 4.8%, up for five out of past seven weeks, its largest weekly gain since early March.
Of note is that other energy prices traded lower, which could mean that the black gold may resume its downward trend in the near – term.
The oil market has been in correction since the Libya and Middle East crisis caused concerns over supply and expectations for some possible fourth – quarter supply tightening. These expectations have been reversed and can be seen among the general commodity deflation. The price of oil could be influenced by a multitude of factors, problems in the US or Europe could drive the price lower, whereas supply concerns or a cut in production in the Middle East and North Africa could easily drive prices higher.