(Bloomberg) -- Crude oil remains in a technical rally that may bring prices to a new 2009 high above $73 a barrel, while keeping the market from falling below $66, according to National Australia Bank Ltd. Oil may extend its three-week uptrend as long as it can settle above $72 a barrel in New York, according to Gordon Manning, a Sydney-based technical analyst. Such a move would also raise the market’s support level, potentially offering traders an entry point in case of a decline.“A close above $72 to $73.50 would be quite significant,” Manning said in a telephone interview. “It would be in keeping with what we’ve seen elsewhere, for example in the stock markets and in copper.”
Oil rose above $72 a barrel on Aug. 3, without settling higher than that level, as increasing industrial activity in the U.S. and China raised hopes fuel demand will recover. The contract for September delivery on the New York Mercantile Exchange traded at $71.64 a barrel at 8:25 a.m. in Singapore, up 22 cents. Futures have gained 61 percent so far in 2009. On the daily continuation chart, the market faces resistance at the June 30 high of $73.38, an eight-month high. If the current ascending channel holds, that level may be breached by the end of this week. “Oil is gaining upside with a break to a new high looked for anytime,” Manning said in a report yesterday. “A daily close above $73 will see the $50 support raised to $66.”
Any upgrade of support to $66 a barrel would come just days of the market trading below that price. Oil on July 29 fell 5.8 percent, the most in about three months, after an unexpected increase in U.S. crude inventories highlighted concern over weak fundamentals.Manning maintained his longer-term target for oil to approach an area around $88 to $100 a barrel. The market hasn’t traded above $88 since Oct. 9.
“The way things are going, I won’t be surprised if we get there before the end of the year,” he said.
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