As we indicated in yesterday’s report the market was poised to make new all time highs and it did on Monday and it has in overnight trading. The market sentiment remains strongly bullish and unlikely to change course in a significant way anytime soon. The market is focused on the new Nigerian disruption of a Shell oil facility, an attack on a Japanese vessel off of Yemen, a possible refining strike in the UK and the overall concern that supply may not be adequate going forward. On top of the Geopolitical & supply risks the market is still strongly driven by the weak US dollar.
Tomorrow we get another snapshot of oil inventories and it will take a very bearish report to stop the surge and begin a long needed downside correction. The early projections are calling for a decline in gasoline of about 2.5 million barrels, a build in crude oil of 1.5 million barrels and a small build in distillate stocks. If the numbers come in as projected the market will likely view this type of inventory profile as neutral to slightly bullish. Basically a report that will not be enough to change the market sentiment at all especially in light of the items mentioned above.
So expect a continuation of what we have seen over the last month or so and expect the market to still push to make new all time highs rather than a correction I the short term. Currently prices are firm.
| Current Expected Trading Range | | | ||
| | 4/22/08 | Change | Upper | Lower |
| | | From | Resistance | Support |
| | 7:26 AM | Yesterday | | |
| May WTI | $117.87 | $0.39 | $115.00 | $99.20 |
| May HO | $3.3150 | $0.0036 | $3.4000 | $2.7100 |
| May RBOB | $2.9800 | $0.0009 | $3.0000 | $2.5200 |
| May NG | $10.748 | $0.015 | $10.500 | $8.700 |
| | | | | |
| Euro/$ | 1.5906 | 0.0024 | 1.5818 | 1.5200 |
| Yen/$ | 0.9728 | (0.0005) | 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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