Crude Oil Closes Above $126, Friday, May 16, 2008 3:43:36 PM

Crude oil closed above the $126 a barrel mark on Friday and again added to its record levels. Light sweet crude closed at $126.29, up $2.17 on the day. Oil touched a record high of $127.82 in the early going before easing back slightly. On Friday, Goldman Sachs boosted its forecast to $141 a barrel in the second half of this year.

Amid choppy trading, oil closed the week up by 33 cents after adding more than $10 last week. Crude closed modestly lower on Thursday after hitting a weekly low earlier in the session and fell on Wednesday. Trading took place earlier in the week as the Energy Information Administration revealed that crude oil inventories increased by 176,000 barrels to 325.8 million barrels. Analyst predicted an increase of about 2 million barrels.

Stochastics and the RSI indicated neutral status the June contract, which expires on Tuesday. The $130 may serve as psychological resistance if the rally continues. If June turns lower, the $120.75 mark could be a resistance point.

In economic news, Department of Commerce data showed that housing starts jumped 8.2 percent to an annual rate of 1.032 million units in April from the revised March rate of 954,000 units. Economists had expected starts to edge down to 940,000 units from the 947,000 unit rate originally reported for the previous months.

Traders also considered the release of a report showing that US consumer sentiment dropped to its lowest since 1980. The University of Michigan/Reuters consumer sentiment number came in lower than expected at 59.5, compared 62.6 in April.