Oil Market Action Continues To Suggest A Top

May 29, 2008 at 11:34 am  ·  Category: Commodities, Market Commentary

This looks like a market that’s running out of steam.

Walter Zimmerman (subscription required), Technical Analyst, ICAP/United Energy

Some more interesting action in the oil market today. 

The Energy Information Administration today announced an 8.8 million barrel decline in crude oil stocks – the largest since September 2004.  Check out BeSpoke’s chart on crude oil inventories.

Generally, a decline in inventory is bullish for prices because it suggests tightening supply and demand. 

But not today.  After initially surging to $133, oil prices sold off and are currently trading around $127.  That’s some pretty interesting action and suggestive of the top I first speculated on last Thursday (“Signs Of A Top In Oil”, Top Gun FP, Thursday May 22).

Posted by Greg Feirman  ·  Trackback URL  ·  Link