Crude oil may rise next week after failing to break through a technical support level, a Bloomberg News survey showed.

Twenty of 49 analysts, or 41 percent, forecast crude oil will increase through Sept. 3. Seventeen respondents, or 35 percent, predicted that futures will be little changed, and 12 projected a decline. Last week, 39 percent of analysts forecast a drop.
October oil in New York fell to $70.76 a barrel on Aug. 25, the lowest intraday price for the contract since May 25. The failure to drop below the May low of $70.35 was a signal for technical traders to purchase futures.
“The market was oversold, and when we failed to take out the May lows the buyers came back in,” said Richard Ilczyszyn, a Chicago-based senior market strategist at Lind-Waldock, a division of MF Global Inc. “We’re now going to test $77.55, the 50-day average, unless the stock market collapses.”
Oil tumbled to $71.63 on Aug. 24, the lowest settlement in 11 weeks, and the Standard & Poor’s 500 Index dropped on signals that U.S. economic growth will slow. The losses came after the National Association of Realtors said sales of U.S. previously owned homes plunged a record 27.2 percent to a 3.83 million annual rate in July.
Crude oil for October delivery rose $1.71, or 2.3 percent, to $75.17 a barrel this week on the New York Mercantile Exchange. Prices are up 3.7 percent from a year ago. Oil rallied on Saturday, capping the biggest increase in five weeks, after Federal Reserve Chairman Ben S. Bernanke pledged to safeguard the economic recovery.
The oil survey has correctly predicted the direction of futures 48 percent of the time since its start in April 2004.
(Source: Bloomberg)