Nymex Oil Breaking Down Nicely
June 4th, 2008The U.S. Dollar Index is getting down into a support zone, along with a low band daily stochastic. A crank rally on the dollar would likely blow the columns out from underneath the oil; short term, anyway. Why? Look at the weekly oil chart. The stochastic is wound up like a three day clock, and it has been extreme for weeks. If the dollar does anything but decline sharply, oil could decline sharply.
Oil is chipping away at $123 now.
Via: Reuters:
Oil fell more than $3 a barrel on Tuesday after the U.S. Federal Reserve issued a rare warning on the inflationary risk posed by a weak dollar, suggesting the central bank is not likely to cut interest rates further this year.
The moved added to a steep sell-off since last month’s peak over $135 a barrel that has been propelled by intensifying worries over high prices denting global energy demand and that increased regulatory scrutiny could cool speculation.
“In short, the commodity complex’s ‘all clear to buy’ signal has just been flicked off and I am sure traders are on high alert for a rebound in the dollar, a bearish event for commodities,” said Chris Jarvis, senior analyst at Caprock Risk Management in New Hampshire.
U.S. crude fell $3.02 to $124.74 a barrel by 1815 GMT after earlier hitting a session low of $124.50. London Brent crude fell $2.95 to $125.07 a barrel.
Dealers said the comments by Federal Reserve Chairman Ben Bernanke, warning that a weak dollar could worsen inflation, pushed the market lower by feeding a recovery in the U.S. currency and dimming the prospects of a a new rate cut later this year.
Sorry Kevin I don’t have email properly configured
to submit this to you as news.
It’s oil related however.
Funny now that Memorial Day has passed
the traditional gouge US public before a holiday
has not resulted in a Pennies decline in the price
now that it’s over.
http://in.reuters.com/article/oilRpt/idINL0518820420080605