Monday, July 2, 2007

Oil Crosses $70/bbl

From Bloomberg:

Oil prices jumped 2.2 percent last week, the third straight weekly gain, after the U.S. government said gasoline stockpiles unexpectedly fell the week before. This week, a record 41.1 million vacationers in the U.S. will travel for the July 4 Independence Day holiday, according to AAA motorist club. More than a third of those surveyed planned to start driving last week.

Crude price are rising ``because of tightness on the refinery side, some maintenance or some accidents, and the utilization rate isn't so high,'' Kenichiro Yamaguchi, the chief operating officer for Petro Diamond Risk Management Ltd. in London, a unit of Mitsubishi Corp., Japan's largest trading company. ``The market is strong on the product side,'' with high demand for distillates, including heating oil, and gasoline.

It's been awhile since we've looked at oil prices, so let's see what the daily and weekly charts say.

The $67/bbl area provided a ton of resistance to oil's price for about two months. But oil broke through in mid-June. In addition, oil retreaded back to the $67 area later in the month and instead used the $67 price level for support.

We also have an ascending triangle formation, which is usually another bullish sign.

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The weekly chart says oil has consolidated in the head and shoulders formation and is now advancing, using the neckline as preliminary support.

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