May NYMEX crude oil futures ended down $1.99 a barrel to $52.35, but the market is still up about 17 percent this year. Has the market gotten ahead of itself?

According to a Bloomberg Report, Goldman Sachs Group said fundamentals don’t support higher crude just yet. According to the article, the discount for May crude oil futures compared with July widened to as much as $3.47 a barrel this week, from $1.18 earlier in the month. That indicates a surplus of oil for immediate delivery. This week, the Energy Information Administration reported U.S. oil inventories rose to a 16-year high in the latest reporting period.

“Last week’s rally was entirely back-end driven as the focus shifted to future fundamentals following quantitative easing efforts,” Goldman said. A more sustained advance is possible “once it becomes clear that the underlying balance of the market has tightened enough to draw inventories globally.”

MF Global Research analyst Ed Meir said in his research notes today that while crude oil seems to be facing resistance, it’s probably not time to set up short positions.More from Ed:

“The sizable price appreciation we have seen in a number of complexes over the past few weeks is arguably justifiable, as the macro statistics out of the U.S. are showing some moderation in the economy’s rate of descent, while concurrently, in the case of commodities, there are legitimate concerns about inflation. However, as is usually the case when prices move in an extended direction in the absence of ‘new news,’ things tend to get overdone, and we suspect that we are close to this point in energy’s case. Specifically, we think the markets will encounter rather stiff resistance between $55-$60, as we suspect this band will cap the top end of the trading range for most of 2009. Nevertheless, picking points to short the market is not advisable right now, as it is perhaps best to let things run their course, and wait for a decisive break back down into the trading range.”

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