Sep 27

Oil Weakens on Greater-Than-Expected Gas Inventories

by Mike Paulenoff, Wed September 27th, 2006

In the aftermath of greater-than-expected gasoline inventories, the USO has weakened into the 55-54.60 area, which is not far from Monday's low at 54.01. My underlying RSI momentum gauge is not confirming today's weakness, and already has carved-out a rounded basing-type pattern as the USO price structure attempts to carve-out a base of its own between 54 and 56. To get anything going on the upside, the USO has to hurdle and sustain above near-term resistance at 56.15/30, which should trigger upside acceleration to 58-59.

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