Energy intraday

· Oil prices fell sharply Monday, pulling back at least temporarily from record levels as investors feared that the financial crisis that forced the sale of Bear Stearns Cos. is a sign of deep economic troubles.

· Crude's plunge came even as diesel prices rose to a new record above $4 a gallon, and gas prices remained high. Diesel, used to transport the vast majority of the nation's goods, rose 1.3 cents to a national average of $4.002 a gallon Monday, according to AAA and the Oil Price Information Service.

· The national average price of a gallon of gas, meanwhile, dipped slightly to $3.283 a gallon, but remains 73 cents higher than a year ago.

· Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is weak. Interest rate cuts, and even the prospect of future cuts, tend to weaken the dollar further.

· But the mass selling Monday -- despite the Fed's Sunday rate cut, the prospect of another cut at the Fed's regular Tuesday meeting, and the fact that the dollar dropped to new lows against the euro on Monday -- could be a sign that the oil market's momentum has turned negative, analysts say.

· But it remains unclear whether Monday's price plunge marks the beginning of a longer decline, or a brief profit-taking retrenchment. If prices do fall, gas and diesel prices could follow.

· The drilling frenzy in North Dakota's oil patch has now reached beneath the state's biggest lake. Oil companies have begun tapping crude oil and gas underneath Lake Sakakawea, using advanced horizontal drill techniques. Lynn Helms, the director of the state Department of Mineral Resources, said it was a logical extension to the formation known as the Middle Bakken, which lies two miles under the surface in western North Dakota and holds millions of barrels of oil.

· Merrill Lynch upgraded the shares of a number of natural-gas service companies, citing expectations of higher nat-gas prices and an expansion of gas drilling activity by the second-half of the year.

· BP PLC said it has signed memorandum of understanding (MoU) with the regional refiner Irving Oil to work together on the next phase for the proposed Eider Rock Refinery project in eastern Canada.

· BP said it will contribute 40 mln usd to the project in St. John, New Brunswick and the two companies will investigate the possibility of forming a joint venture to build the refinery should they decide to proceed.

MCX Crude Oil April (Daily Chart)

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Crude Oil April: Buy above 4235 Target 4290 and 4315 Stop loss 4185



MCX Natural gas April (Daily Chart)

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Natural Gas April: Buy above 393 Target 399 and 405 Stop loss 386.50

MCXARUN