Keep your eye on Crude….

The recent run-up in crude oil to new highs has sparked a new wave of interest and buying in the energy complex.

Crude oil in pre-market trading crossed into uncharted levels to a new record high of $113.66 a barrel.

Firstly, due to a substantially weaker dollar-which has held near record lows this week against the Euro. A weak dollar causes dollar-denominated commodities to become more attractive to foreign investors.

Furthermore, it comes down to supply/demand fundamentals. With rising demand, any supply disruptions causes tremendous ripples in the energy complex. With constant infighting in Nigeria, the war in Iraq and the recent shutdown of three key oil exporting ports in Mexico puts upward price pressures on the energy complex and directly supports higher crude oil prices.

Moreover, technically crude oil is strong buy. All short-term and long-term technical indicators point to higher prices. If Crude trades through the intraday record of $113.66, it will test the first resistance level of $113.99 a barrel. If it closes higher than the 1st resistance level it should trade to $114.76 a barrel. My opinion hasn’t changed, traders should only be long this market.