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Monday, February 27, 2012

Crude oil futures forecast feb 28 2012

Crude oil futures forecast feb 28 2012 : Brent crude prices pulled back on Monday, after five straight higher settlements, as G20 concerns about the effect of higher oil prices on global growth and a stronger dollar helped counter support from tensions with Iran and potential supply disruptions.

Brent April crude fell $1.66 to $123.81 a barrel by 12:41 p.m. EST (1741 GMT), after settling at a near 10-month peak above $125 a barrel on Friday.

Brent remained on pace to post a nearly 12 percent gain for February and is up nearly 16 percent on the year, after a 13.3 percent gain in 2011, raising fears of strains on some of the world's weaker economies, particularly in Europe.

U.S. April crude fell $1 to $108.77 a barrel, having swung from $108.24 to $109.77, after seven straight higher closes.

U.S. crude is on pace for a 10 percent gain in February and is up nearly 11 percent for the year after a 2011 gain of 8.2 percent.

Brent's premium to U.S. crude narrowed on Monday, hovering near $15 a barrel after slipping below $15 intraday.
Prices are testing 61.8% Fibonacci extension resistance at 110.04, with a break higher exposing the 76.4% level at 114.25. Near-term support lines up at 106.70, the 50% Fib extension. As we noted last week however, RSI studies are at their most overbought since April (the last time Iran-linked jitters inflated crude prices). That was followed by a sharp decline in May, so the threat of a reversal may be rising.

Crude oil continues to hold up strong and is headed straight for its key resistance levels without any real pullback. Chasing price action like this is not something that one should do often because risk: reward is not in your favor. I am staying on the sidelines for oil until I see a setup that has more potential and less risk.

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