The price surge continues as the market seems to now be heading back to the highs made at the beginning of last week. After a surprisingly bullish inventory report the market was hit with a strong round of short covering and the entry of new longs into the market. A weak dollar also contributed to yesterday’s strong move to the upside.
Every aspect of the inventories surprised the market on Wednesday…the crude oil build was smaller than expected while the declines in both gasoline and distillate were more than expected. This coupled with an over 1% decline in refinery runs versus and expectation of a 0.5% increase in runs. Even the 5 week slide in total US demand was broken with a slight week on week increase in total demand that was mostly a result of a small increase in weekly gasoline demand. The report was enough for the market to view the fundamentals as bearish, at least as measured by this one report. It should be noted that in spite of the larger than expected decline in gasoline the year on year surplus of gasoline stocks is still over 23 million barrels. The fundamentals still have long way to go to clean up the overhang in gasoline as we inch closer to the upcoming driving season.
As we have been discussing all week the market seems to have discounted last week’s sell-off ( although prices have still not recovered fully to the highs). As such we expect the market to make another pass at hitting and possibly breaking last week’s highs. Volatility still remains above normal and erratic, choppy patterns are still front and center.
The dollar seems to have stabilized so far in overnight trading and may not be a factor in today early oil trading. Currently prices are mixed.
| Current Expected Trading Range | | | ||
| | 3/27/08 | Change | Upper | Lower |
| | | From | Resistance | Support |
| | 6:55 AM | Yesterday | | |
| May WTI | $107.00 | $1.10 | $112.50 | $99.20 |
| Apr HO | $3.0700 | $0.0262 | $3.2500 | $2.7100 |
| Apr RBOB | $2.7335 | ($0.0094) | $2.9000 | $2.5200 |
| Apr NG | $9.558 | ($0.014) | $10.250 | $8.700 |
| | | | | |
| Euro/$ | 1.5747 | (0.0007) | 1.5818 | 1.5200 |
| Yen/$ | 1.0088 | (0.0014) | 1.0450 | 0.9900 |
Dominick A. Chirichella
Energy Management Institute
tel 646-202-1433
tel 845.368.3904
fax 801.383.7510
www.advancedenergycommerce.com
This message and any attachments relate to the official business of the Energy Management Institute ("EMI") and are proprietary to EMI. This e-mail transmission may contain information that is proprietary, privileged and/or confidential and is intended exclusively for the person(s) to whom it is addressed. Any use, copying, retention or disclosure by any person other than the intended recipient or the intended recipient's designees is strictly prohibited. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or the taking of any action in reliance on this information is strictly prohibited. If this message has come to you in error, please immediately notify the sender by telephone or return e-mail and delete the original transmission and its attachments without reading or saving in any manner. Thank you.
No comments:
Post a Comment