By Will Kennedy
Feb. 26 (Bloomberg) -- New York oil may extend a three-day rally if it closes above $44.52, the 34-day moving average for the April futures contract, according to technical analysis by broker PVM Oil Associates Ltd.
“The technical pieces are falling into place for a further move up, but there’s still some heavy-duty resistance to be dealt with,” PVM said in its daily technical report for clients. “We need to clamber over the 34-day moving averages.”
Oil for April delivery rose 6.4 percent to $42.50 a barrel yesterday on the New York Mercantile Exchange, the highest close since Jan. 26. The chart shows prices have risen above 5-, 8- and 13-day moving averages for the April contract. Crude’s rise above $41.15, the peak reached during the run-up to the first Gulf War in 1990, is “constructive,” PVM said.
Today, oil for April rose as much as 1.7 percent to $43.24 a barrel. The contract traded at $43.04 at 10:20 a.m. London time.
For London’s Brent crude oil, the 34-day moving average for the April contract is $45.93. The contract rose as high as $44.95 today on the ICE Futures Europe exchange.
Traders use moving averages of closing prices over different periods to predict key levels of resistance and support for prices. Yesterday, consultant PetroMatrix GmbH said New York oil may rally if it closed above what was then its 50-day moving average of $40.25 a barrel.
To contact the reporter on this story: Will Kennedy at wkennedy3@bloomberg.net
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