crude oil to trade higher in short term

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    How are the jerry can sales going ?

    Iraq and the continuing strikes in Venezuela, traders said Monday.
    Early Monday, the benchmark February crude contract on the New York Mercantile Exchange hit a new two-year high of $33.17/bbl in after-hours Access trading after breaking through the psychological resistance of $33/bbl. At 0235 GMT, the February contract had eased back to $33.00, up 28 cents from Friday's floor close.
    Traders said the next resistance level is $34.95/bbl.
    "There's no letting up...Bullish fundamental news kept pouring in," one trader said, adding "the Venezuelan strike has entered its fifth week, and no resolution is in sight."
    Also, the U.S. is continuing its military buildup in the Middle East, and news that Saudi Arabia had agreed to allow United Nations forces to set up bases for any attack on Iraq has added to the bullish tone, the trader said.
    "There were also some unsubstantiated reports saying that the Saudis were prepared to provide 'assistance' to attack Iraq," another trader said.
    The heightened standoff between the U.S. and North Korea over the latter's restarting of nuclear power plants has provided more support for crude prices.
    On the technical front, charting of price trends has been made more complicated by the heavy inflow of bullish fundamental news, traders said.
    "We can't even chart the prices properly because of all the incoming fundamental news," the first trader said.
    One element that could cap the price surge would be a decision by the Bush administration to release crude from its Strategic Petroleum Reserve, he added.

    -By Edgar Ang, Dow Jones Newswires; +65-64154065; [email protected]

    (END) Dow Jones Newswires
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