Naz News, Gappers and FLE's

[MWM]

Crude Is Poised to Test New Lows This Year: Technical Analysis
July 06, 2010, 8:24 AM EDT

July 6 (Bloomberg) -- Crude oil is poised to resume its decline and test new lows for the year in the weeks ahead, according to a technical analysis by Barclays Capital.

Crude futures are “heading to the lows last seen in July 2009,” MacNeil Curry, a Barclays analyst in New York, said in a telephone interview. “The bigger picture includes a trend in risk aversion, and we are seeing equities and risk assets breaking down pretty hard.”

The 52-week low for the front-month contract is $58.32 on July 13, 2009. The August contract may test support at the low of $70.93 a barrel set on June 7, Curry said.

“That’s the initial support, which probably won’t hold,” Curry said. Beneath that is a low of $68.59 on May 25, and then there is “congestion support in the $66.81-to-$66.45 area.”

“Volume is picking up as we break down and volume tends to go with the trend, so it all points to further weakness,” Curry said. “Other commodities are trending down. The S&P is breaking down and risk assets will remain under pressure.”

U.S. stocks fell last week, with the Dow Jones Industrial Average extending its longest slide since the financial crisis of 2008, and commodities slumped as data on jobs and factory orders added to concern the economic rebound is slowing. The Standard & Poor’s 500 Index also dropped. The Dow and S&P closed at their lowest levels of the year.

Crude oil for August delivery at Cushing, Oklahoma, dropped $6.72, or 8.5 percent for the week, to $72.14 a barrel, the lowest settlement price for the front-month contract since June 8.

--Editors: Richard Stubbe, Bill Banker

To contact the reporters on this story: Samantha Zee in San Francisco at [e-mail]

To contact the editor responsible for this story: Dan Stets at [e-mail]