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Oil trying to snap 2-day skid, weekly loss likely

Published 02/22/2013, 01:44 PM
Updated 02/22/2013, 01:45 PM

Investing.com - Oil futures are trading slightly higher during Friday’s U.S. session, bouncing back from a two-day decline, but today’s efforts likely will not be enough to prevent a weekly loss for crude.

On the New York Mercantile Exchange, light, sweet crude futures for April deliver rose 0.12% to USD92.95 per barrel in U.S. trading Friday. Earlier in the session, West Texas Intermediate futures reclaimed the USD93 per barrel and traded as high as USD93.47. The low of the day is USD92.49 per barrel.

Barring a significant move higher into the close, Friday’s gains will not enough to erase Thursday’s 2.5% plunge, nor will today’s action be enough for oil to skirt a weekly decline.

Traders now view WTI futures as range-bound in the USD90 to USD100 per barrel area. A move below USD90 would represent a violation of the 200-day moving average for oil futures, a bearish sign in the eyes of many technical analysts.

However, a move above USD100, which would like take Brent crude above USD120 per barrel, could be seen as a negative. With the global economic recovery still fragile, WTI above USD100 and Brent above USD120 could be catalyst to hamper growth and cause demand destruction, forcing oil down in the process.

On a related note, market participants have recently speculated that Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, may start pumping more crude this month to ebb prices lower to avoid lost demand.

Elsewhere, Brent for April delivery added 0.44% to USD114.03 per barrel on the ICE Futures Exchange.


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