Latest As Of Thursday Morning

Another round of inventories and yet another surprise. Yesterday’s significant drawdown of 7.6 million barrels was well beyond anyone’s expectations. The market was poised to move lower only to find support from the inventory report and move to higher ground. The majority of the crude oil draw was in the Gulf Coast region and is likely a result of the ongoing weather problems in the Houston Ship Channel.  As the fog problems clear out it is likely that a good portion of the delayed crude oil imports will be made up. That said total crude oil inventories are now below the 300 million barrel level as well as below the 5 year average.

 

Distillate stocks also declined more than expected and until the projected warmer than normal weather takes hold (over the next few days it will keep the edge on HO. On the other hand gasoline inventories increased strongly putting the gasoline stock level now above the normal long term range for this time of the year.

 

Overall the report was bullish but possibly not enough to push prices above the $100/bbl just yet as the market remains cautious about the weakening Us economy. In addition liquidity will begin to decline as more and more players head to the sidelines ahead of the long holiday week in the US.

 

Nat Gas stocks will be released this morning. The market is expecting a withdrawal of 130 to 140 BCF from inventory. Even at this strong projected decline the year on year surplus compared to the 5 year average should still remain robust.

 

Currently prices are steady.

 

Current Expected Trading Range
	12/20/2007	Change	Upper	Lower
	Electronic	From	Resistance	Support
	6:36 AM	Yesterday
Feb WTI	$91.79	$0.55	$95.00	$85.00
Jan HO	$2.6240	$0.0261	$2.7500	$2.5000
Jan RBOB	$2.3483	$0.0164	$2.5000	$2.2000
Jan NG	$7.166	($0.013)	$7.660	$6.640

 

Dominick A. Chirichella

Energy Management Institute

tel 646.202.1433

fax 801.383.7510

dchirichella@emimail.org

www.energyinstitution.org

www.advancedenergycommerce.com