Oil is back?
Equities had their expiration day melt-up (read short covering) on Friday and oil traders decided today was their turn. On the last day of trading for the CL (light sweet crude) October contract, we saw an unprecedented 23 point jump that hit an exact high of 130, before settling at 120.
The November contract, stayed under the key 110 level (an indication that expected future supplies will exceed current supplies: for more on commodity futures read this: link). But it is the first close above the 20 dma in 16 trading days and long overdue. Putting up the 2008 fibs, 109.05 is 61.8% and a level oil bulls will want to hold. Next stop would be 116.35, 50% if this hedge play keeps rolling. However, given the lower price on each future contract (Nov, Dec), higher prices might be unsustainable. Furthermore, regulators are peering into this move as well:
Sept. 22 (Bloomberg) -- The Commodity Futures Trading Commission is ``closely monitoring'' the biggest ever gain in oil prices on the New York Mercantile Exchange for potential manipulation, the agency's acting chairman said.
``We are working closely with Nymex compliance staff to ensure that no one is taking advantage of the current stresses facing our financial marketplace for their own manipulative gain,'' Acting Chairman Walter Lukken said today in a statement.
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on Monday, September 22, 2008 at 9/22/2008 05:50:00 PM.
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