Oil Prices rally after hurricane alert

It has been a very turbulent week in the oil market, with oil prices trading an $8 range. On Tuesday prices made an intraday low at $67.14/bbl, which appeared to be a significant break below the support level of $68.50/bbl, which we mentioned last week. Crucially though, the closing price stayed above this level and since then oil has rallied very strongly, trading above $75/bbl at the time of writing.

The move up can also be attributed to a few fundamental factors. Firstly, the dollar has weakened a lot, and secondly, a government report released on Thursday predicted that this year’s hurricane season may be the most ferocious to date. This could play havoc with oil supplies over the next few months, and as a result oil prices moved higher after the announcement.

Moving back to the technical’s, today’s intraday high of $75.72/bbl may become a good resistance level and if the market stays below this level for the next few trading sessions we could move back to $72/bbl.