The bleeding from last week seems to have stopped. Prices recovered in a gasoline short covering rally on Monday and prices are firm this morning as the US dollar goes through another round of selling. As we discussed in yesterday’s report this week’s action will be a strong signal as to whether or not last week was the beginning of the downside correction or just another blip in the surge to higher prices. The market remain over-valued.
Tomorrow we get another snapshot of inventories. The early expectations are calling for a build of about 1.0 million barrels of crude, a decline of about 900,000 barrels in gasoline and a withdrawal of 1.6 million barrels of distillate. Overall a neutral to even slightly positive inventory report. This would be the second week in a row of declines in gasoline stocks a positive sign but a long way away from eliminating the significant overhang in gasoline inventories.
We expect the market to remain choppy as many competing factors are pushing and shoving at prices. For the moment it is still unclear as to whether or not the market will make another run at the highs before moving lower.
Currently prices are steady.
| | 3/25/08 | Change | Upper | Lower |
| | | From | Resistance | Support |
| | 7:33 AM | Yesterday | | |
| May WTI | $101.08 | $0.22 | $112.50 | $99.20 |
| Apr HO | $2.9742 | $0.0111 | $3.2500 | $2.7100 |
| Apr RBOB | $2.6701 | $0.0289 | $2.9000 | $2.5200 |
| Apr NG | $9.407 | $0.078 | $10.250 | $8.700 |
| | | | | |
Dominick A. Chirichella
Energy Management Institute
tel 646-202-1433
tel 845.368.3904
fax 801.383.7510
www.advancedenergycommerce.com
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