Oil just couldn't bust through $60

Posted Feb 5th 2007 3:10PM by Michael Fowlkes

Last week we watched as oil continued to make it's charge up to the psychological $60 barrier. On Friday we saw oil close at $59.02 and looking strong. This week started out incredibly strong but has since cooled off in afternoon trading.

Cold weather has been the major factor in recent gains for the precious crude and that is exactly where traders are continuing to focus their attention. The real question now is if we are going to see oil using $60 as a resistance point or if we are going to watch prices surge through resistance and start to trade in the $60's throughout the remainder of the winter months.

Friday I made the prediction that we would be seeing prices not breaking though $60 until tomorrow's session. I figured that we would see a little selling pressure after Friday's strong gains but would watch prices resume their upwards motion tomorrow. This morning I thought I was going to have to eat my words as oil looked determined to prove me wrong and hit a high of $59.95 early in the day.

After this morning's strong run we have seen some selling pressure return and push prices down on the day to $58.59 down $0.43. Most of the major oil companies have traded flat through most of the session as Wall Street waits to see just what is in store for oil this week. We will check back in after today's close to see how where things settle on the day.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.

Tags: BP, Chevron Corp., ChevronCorp., ExxonMobile