Another week with the same drivers and pretty much the same reasons attributed to the current high prices in the complex. The primary reasons remain the weak US dollar, Geopolitical issues and concerns of potential supply disruptions in the future. All are interesting and all have been priced into the market several times over since the beginning of the year.
More specifically the market is holding firm in oils this morning on concern of a weakening dollar, over last week’s Nigerian pipeline explosion (which Shell indicated impacted a minor amount of oil flow), talk of UK North Sea strike and possible strikes at the French oil terminals. Whether or not any of the above materialize is still a question. Even if they do these type of actions usually last for a limited time and have a limited impact on supply.
Bottom line the market sentiment remains strongly bullish and not yet ready for any significant downside correction. This week should be similar to last week with new highs likely at some point in time this week and unless we see a noticeably bearish inventory report mid-week the market is not likely to experience any significant move to the downside this week.
Currently prices are firm for oil and weak for the dollar versus both the Euro & the Yen.
| Current Expected Trading Range | | | ||
| | 4/21/08 | Change | Upper | Lower |
| | | From | Resistance | Support |
| | 6:53 AM | Yesterday | | |
| May WTI | $117.01 | $0.32 | $115.00 | $99.20 |
| May HO | $3.3205 | $0.0282 | $3.4000 | $2.7100 |
| May RBOB | $2.9927 | $0.0034 | $3.0000 | $2.5200 |
| May NG | $10.672 | $0.085 | $10.500 | $8.700 |
| | | | | |
| Euro/$ | 1.5864 | 0.0097 | 1.5818 | 1.5200 |
| Yen/$ | 0.9721 | 0.0058 | 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
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