Latest As Of Thursday Morning

Not that the market cares much but today we get a snapshot of both oil & NG inventories. The market has pretty much ignored the vast majority of the normal market drivers in this latest move to $100/bbl. In fact with the exception of the technicals most of the market drivers are bearish to neutral at best. The market is currently decoupled from most of the catalyst. Prices are decidedly overvalued at this point in time and very susceptible to a strong retracement once the market sentiment changes and begins to focus on the reality of what the data is actually suggesting.

 

Today’s inventory report is expected to show builds in both crude oil (6^th weekly build in a row) and gasoline (9^th weekly build in a row) adding to already year on year surplus of gasoline. In fact gasoline inventories are at the highest level since 1994. Overall we view this week’s report as biased to the bearish side but as we discussed earlier it is unlikely that the market will focus too much on the report today unless it is significantly different than the expectations.

 

Projections		2/21/08
	Current	Change from	Change from
	Projections	Last Year	5 Year
mmbls		vs. Proj.	vs. Proj.
Crude Oil	2.5	(24.0)	4.0
Gasoline	0.8	7.9	12.5
Distillate	(1.5)	(2.8)	8.6
Ref. Runs%	-0.1%	-0.2%	-2.8%
Change Level	85.0%	85.2%	87.8%
	BCF	BCF	BCF
NG, BCF	(165)	(88)	112

 

As we have been indicating we expect the current trading pattern to continue. Currently prices are lower across the board.

 

Current Expected Trading Range
	2/21/08	Change	Upper	Lower
		From	Resistance	Support
	8:32 AM	Yesterday
Apr WTI	$98.87	($0.83)	$100.00	$85.25
Mar HO	$2.7280	($0.0266)	$2.7500	$2.4000
Mar RBOB	$2.5550	($0.0302)	$2.6500	$2.2000
Mar NG	$8.961	($0.004)	$9.250	$8.250

 

 

 

Dominick A. Chirichella

Energy Management Institute

tel 646.202.1433

fax 801.383.7510

dchirichella@emimail.org

www.energyinstitution.org

www.advancedenergycommerce.com

 

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