Oil Finds Resistance above $84; Bulls Still in Charge

Continuing a negative movement on the New York Mercantile Exchange, crude futures closed just above $84 a barrel Tuesday as oil traders remained cautious ahead of this week's inventory data, which is expected to spotlight still-bearish crude supplies.

Today, the price of light, sweet crude oil for May delivery traded lower for a fifth consecutive session on the NYMEX, ultimately settling to $84.05 a barrel.

Moving in opposition to crude, both NYMEX gasoline futures and natural gas spot prices at the Henry Hub gained on the session to $2.31 a gallon and $4.16 Mcf, respectively.

"Oil prices have fallen in recent sessions, and rightly so," said Phil Flynn, senior market analyst at Chicago-based PFG Best.

Oil Bulls Still in Charge

But even with prices beginning to wind down from recent highs, oil bulls haven't lost their grip on the energy market.

In fact, oil and gasoline futures maintained bullish price tags for Tuesday's sessions despite MasterCard's SpendingPulse report underscoring a drop in retail gasoline demand by 3.6% for the previous week.

However, emphasis on this fundamental demand has stymied oil prices from reaching a new threshold of $90 a barrel.

Highlighting demand concerns in the market, Flynn pointed to the International Energy Agency's comments as a primary impetus for today's lower crude price.

Specifically, the IEA has warned that oil prices could potentially bottleneck demand growth if prices rise too far unmitigated.

"Last week, oil broke above $85, but it did so on light volumes, and I think the [market] was fueled by a bit of irrational exuberance after the price reached that level," Flynn said.

"Since that point, the market is focusing more on the supply and demand situation and the fact that the summer driving season is just around the corner, but supplies are still going to be more than ample," the analyst contended.