Oil slips back from 18-month high
Thursday, 8 April 2010
NEW YORK, April 7 (Reuters): Oil slipped back from 18-month highs around $87 Wednesday, taking a breath after two weeks of gains as the dollar strengthened against other currencies.
Reports of a larger-than-expected drop in US gasoline stockpiles helped bolster the market, suggesting fuel demand is rebounding as the economic outlook improves in the world's biggest oil consumer.
But technical charts indicated oil might be due for a period of consolidation after a rise of around 9 per cent in seven trading days that left the 14-day relative-strength indexes (RSIs) around 70, suggesting markets were modestly overbought.
US light crude futures for May were 33 cents lower at $86.51 by 6 a.m. EDT, down from Tuesday's intraday peak of $87.09, the highest since October 2008. London ICE Brent fell 17 cents to $85.98.
"We think the current rally in crude, although still looking formidable on the charts, is getting long in the tooth, and due for a modest pullback, especially if the dollar regains its strength in the wake of continued eurozone jitters," said Edward Meir, senior commodities analysts at brokers MF Global.
Reports of a larger-than-expected drop in US gasoline stockpiles helped bolster the market, suggesting fuel demand is rebounding as the economic outlook improves in the world's biggest oil consumer.
But technical charts indicated oil might be due for a period of consolidation after a rise of around 9 per cent in seven trading days that left the 14-day relative-strength indexes (RSIs) around 70, suggesting markets were modestly overbought.
US light crude futures for May were 33 cents lower at $86.51 by 6 a.m. EDT, down from Tuesday's intraday peak of $87.09, the highest since October 2008. London ICE Brent fell 17 cents to $85.98.
"We think the current rally in crude, although still looking formidable on the charts, is getting long in the tooth, and due for a modest pullback, especially if the dollar regains its strength in the wake of continued eurozone jitters," said Edward Meir, senior commodities analysts at brokers MF Global.