Monday certainly was a choppy trading day with selling setting in by mid-session pushing prices now closer to the lows of two weeks ago rather than the highs. Not much driving the market and as such very little support for moving higher. The market has been and still remains over-valued and struggling for reasons not to move significantly lower. On the financial side the US dollar has been going through a bit of short covering and firming in overnight trading against the Euro & the Yen. This is putting additional pressure on oil, metals and other commodity prices.
Tomorrow the market gets another snapshot of oil inventories. The early expectations are calling for a build in crude oil of over 2 million barrels. Over the last 12 weeks crude oil has built 11 times. On the oil product side we are likely to see a modest decline in both gasoline and distillate. However, the decline could be a bit muted as many are forecasting yet another push down in demand, especially for gasoline. Refinery runs are likely to remain in the low to mid 80% level as a result of ongoing maintenance and poor refinery margins. We believe the report will be neutral at best if the numbers come in as expected.
Higher energy & commodity prices are continuing to work their way into the economy adding additional pressure along with the financial mess on Wall Street to a US economy that is clearly in the contracting phase of the long term economic cycle. The market sentiment for energy is looking for a reason to remain bullish but is having no luck in finding it. The Geopolitics are quiet (the Iraqi situation in Basra is stable an oil is flowing), the US dollar is firming a bit and the fundamentals remains well supplied.
We expect prices to at least test the lows from earlier last week and barring any unforeseen bullish support we believe the market will continue to break down further as more air escapes from the oil bubble. Expect the pattern to remain choppy and susceptible to large moves on little new information.
Currently oil prices are mostly lower while the dollar is firming.
| Current Expected Trading Range | | | ||
| | 4/1/08 | Change | Upper | Lower |
| | | From | Resistance | Support |
| | 7:43 AM | Yesterday | | |
| May WTI | $101.13 | ($0.45) | $112.50 | $99.20 |
| May HO | $2.9105 | $0.0044 | $3.2500 | $2.7100 |
| May RBOB | $2.6150 | ($0.0121) | $2.9000 | $2.5200 |
| May NG | $9.950 | ($0.151) | $10.250 | $8.700 |
| | | | | |
| Euro/$ | 1.5601 | (0.0128) | 1.5818 | 1.5200 |
| Yen/$ | 0.9994 | (0.0077) | 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