With the unofficial start of the “summer driving season” the world & the US have ample oil supplies. The major difference between the start of the summer driving season in the US this year versus last year is as follows:
· The price is significantly higher
· The gasoline overhang is significantly wider
· The market sentiment is strongly bullish and betting that a significant shortage will materialize sooner than later (very unlikely)
All of the drivers we have been discussing in our morning report for months remain the same. We had a bit of a sell-off yesterday but as has been the case these sell-off’s are short and shallow as evidenced by the fact that the market is once again surging as traders in the US start heading to the sidelines to enjoy the long Memorial Day holiday weekend. Although electronic venues will be trading on Monday liquidity will be significantly reduced.
We expect next week will bring more of the same as the market is not ready for the long awaited correction.
Currently oil is firm while the dollar is slightly weaker.
| Current Expected Trading Range | | | ||
| | 5/23/08 | Change | Upper | Lower |
| | | From | Resistance | Support |
| | 7:28 AM | Yesterday | | |
| Jul WTI | $132.79 | $1.98 | $135.00 | $99.20 |
| June HO | $3.9922 | $0.0379 | $4.0000 | $2.7100 |
| June RBOB | $3.3720 | $0.0423 | $3.5000 | $2.5200 |
| June NG | $11.702 | $0.005 | $12.000 | $8.700 |
| | | | | |
| Euro/$ | 1.5731 | 0.0050 | 1.6000 | 1.5200 |
| Yen/$ | 0.9665 | 0.0073 | 1.0450 | 0.9000 |
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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