Crude oil futures were lower this morning after crossing $73 a barrel on Thursday. According to a Bloomberg article, arecord plunge in European industrial production prompted speculation that bets on an economic recovery are premature. OPEC also announced that May output from its 12 members averaged 28.27 million barrels a day, up 135,000 barrels from the prior month. The stock market has also pulled back and the U.S. dollar has gained some lost ground, also dampening enthusiam for crude oil.
Lind Plus Senior Market Strategist Richard Ilczyszyn recommends for now, investors should “go with the trend, buy the dip,”but if you are bullish, you might want to be a bit more patient as the market could pull back further.He said he’d be cautious about buying near these highs. Many technical traders are watching the 200-day moving average near $64, which he said represents a “value area” for long-term bulls to buy.
The 50-day moving average comes in at $59, which he said should act as the next major support point if the market faces a more significant correction. Richard notes that a lot of people don’t think the market could fall that far, but crude oil is volatile. “This market could fall $5, $6, $7 in a day, absolutely it can,” he said.
Crude oil has rallied more than 80 percent this year, up 30 percentin May alone, its largest monthly gain in 10 years. July futures were last trading at $72.02.
Futures trading involves risk of loss and is not suitable for all investors.
