Crude oil is not letting up in its march higher, even with the daily and weekly fluctuations in European news. Crude oil futures are climbing a wall of worry, as buyers keep bidding the prices up though we have yet to see a major intraday spike. We see $92 as a key support level for the October ’12 contract (see chart).
Furthermore, we believe that Middle Eastern tensions, a crucial factor for crude, is on the rise. No one wants to be heavily short the crude oil market with massive uncertainty in the Middle East. Yes, typically gas prices tend to decrease in election years, but with the focus on Iran and Israel, we see crude oil bulls continuing to climb the wall of worry. The next major upside price target for the Oct 12 contract is $104. We emphasize our view that $92 is a key level. If crude oil stays above $92, look for more bulls to come into this market.
Platinum futures are continuing their rapid rise this morning as production difficulties in a major South African mine continue. Platinum futures have broken through their three-month high and breached $1510 yesterday before settling below that key pivot level (see Platinum daily chart on next page).