Crude rallied strongly into Christmas, closing in New York at a 2-year high of $91.50 on 23 December. China‘s Christmas day rate hike of 25 bps took some gloss off the recent rally as trading resumed on Monday at $91.07, but despite the reduced fuel demand from car-drivers as the US succumbed to massive snow storms, the price did manage to bounce to a new record high at $91.88 before pulling back to close at $91.00. Midweek trading saw the price range in thin volume between $90.80 and $91.65 ahead of the US DOE Inventory data delayed until Thursday. The Inventory release reported a 1.26 million barrel draw which traders perceived as bearish despite being below expectations and crude dropped sharply to a low of $89.02 before recovering to $89.84.
Traders are generally agreed that the price has further upside potential towards $100 in the New Year, but are divided as to where it may go above that level. To the downside, $80.00 is now seen as very strong support for the foreseeable future as crude closed the year pretty much midway between these two longer-term levels.
