Tuesday, January 19, 2010
The Dollar & Crude Oil
The Organization of Petroleum Exporting Countries won’t need to raise oil production this year as its output of natural gas liquids increases, the International Energy Agency’s deputy executive director said. >>READ STORY
After peaking just around resistance last week of $84, crude oil has pulled back and looks like it may gravitate towards its 100-ema @ $75. The build in crude and the worry about a continued economic recovery has stemmed this rally, that I was forecasting in oil. Today's news from OPEC has added more cold water to the rally. My premise had been that oil was and has been following a 4 month lag to the movement in gold prices....that remains to be seen. If the winter weather goes back into a deep freeze and as earnings reports come out this week could rerignite the expected global recovery we could see oil prices rebound. On Thursday, China is expected to report a 20 percent year-over-year jump in industrial output for December, which would be the fastest pace in close to four years. >> READ STORY
The dollar still appears to be putting in a bullish flag formation. Testing it's 40-ema which had been resistance on the way down, now appears to be support...watch this.