Energy intraday

· Oil prices climbed back above $103.98 a barrel Wednesday as OPEC decided against putting more oil on the global market despite near record-high prices for crude. Natural gas rose as crude oil and other energy commodities surged and colder weather was forecast through the middle of March, signalling higher demand. Speculators returning to the market as prices dipped also contributed to the rebound.

· OPEC president and Algerian energy minister Chakib Khelil said during a press briefing following the cartel's production meeting today that high oil prices were due not to supply issues but to the "mismanagement" of the US economy.

· Ongoing weakness of the US dollar and the credit crunch precipitated by the sub-prime mortgage crisis, which have fuelled buying of commodities as a hedge, have driven the price of crude higher.

· European diplomats warned Iran that its atomic program, pursued in defiance of UN orders to stop, will hurt the government in Tehran until it halts nuclear fuel production and clarifies documents alleging weapons studies.

· The International Atomic Energy Agency's 35-member board of governors is finishing a meeting today in Vienna about nuclear inspections in Iran. The United Nations body confronted Iran last month with documents that showed Iran may have studied atomic missile design. Iranian diplomats say the documents are forged.



Weekly Inventory Update:



· For the week ended Feb. 29, crude-oil inventories fell by 3.1 million barrels, or 1 percent, to 305.4 million barrels, the Energy Department's Energy Information Administration said in its weekly report. While the stockpiles were 4 percent below year-ago levels, analysts had expected a gain of 2.3 million barrels, according to a survey by Dow Jones Newswires.

· Gasoline inventories rose by 1.7 million barrels, or 0.7 percent, to 234.3 million barrels, which was 9 percent above year-ago levels. Analysts expected stockpiles of the motor fuel to rise by only 900,000 barrels last week.

· Demand for gasoline over the four weeks ended Feb. 29 was 0.4 percent higher than a year earlier, averaging nearly 9.1 million barrels a day.

· At the same time, U.S. refineries ran at 85.9 percent of total capacity on average, a gain of 1.2 percentage points. Analysts expected a gain of only 0.3 percentage point.

· Inventories of distillate fuel, which includes diesel and heating oil, fell by 2.4 million barrels to 117.6 million barrels for the week ended Feb. 29.Analysts expected distillate stocks to drop by 1.9 million barrels.

· At the pump, gas prices rose by a penny overnight to a national average of about $3.18 a gallon Wednesday and remain well above the year-ago average of $2.49 a gallon, according to AAA and the Oil Price Information Service. The Energy Information Administration has said gas prices are expected to peak at $3.40 a gallon this spring.



MCX Crude Oil March

Technical Outlook:

Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Crude Oil March: Buy at 4140 Target 4215 and 4260 Stop loss at 4105

MCX Natural gas March

Technical Outlook:

Momentum studies are bullish but are now at overbought levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over up which is a bullish indication. The stochastics indicators are rising from oversold level, which is bullish and should support higher prices. The market's short-term trend is positive as the close remains above the 9-day moving average. The downside closing price reversal on the daily chart is somewhat negative.

Recommendations:

MCX Natural Gas March: Buy at 383 Target 389 and 395 Stop loss 381.50

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