energy intraday

Energy
20 May 2008 11:37:42



Major Headlines:



Oil stayed close to record highs as OPEC looked increasingly unlikely to raise production despite peak prices, and on expectations of higher demand from China. And also the oil price has managed to hold near $125/bbl despite concerns about economic weakness and expectation for a stronger U.S. dollar



Goldman Sachs, the most active investment bank in energy markets, has predicted crude will jump to $141 in the second half of the year.



Looking ahead, all eyes will remain on the dollar for short-term direction, a weekly U.S. energy inventory report due Wednesday and market players will track imports into China after last week's disaster. Also, participants will keep an eye on U.S. gasoline stocks ahead of the driving season, which kicks off late May, to see whether the credit crunch has had a severe impact on demand



Saudi Arabia's oil minister, Ali al-Nuaimi, said Friday the kingdom had increased oil production by 300,000 barrels per day from May 10 in response to orders from customers, mostly from the United States, and will pump 9.45 million barrels per day in June.



But Nuaimi reiterated OPEC's long-standing view that global oil supply was balanced with demand and that market fundamentals were sound. Saudi Arabia is the biggest producer in the 13-nation OPEC, which pumps 40 percent of the world's oil. Iran, another major producer, said on Saturday that any output hike by OPEC as requested by the United States would not affect prices.



MCX Crude Oil June (Daily Chart)






Technical Outlook:The daily stochastic have crossed over up which is a bullish indication. The stochastic 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 EMA. The downside closing price reversal on the daily chart is somewhat negative




Market is expected to remain positive and the resistance is seen at 5378 levels. If market breaches 5378 may see prices to take further upside towards 5427 and 5460 however if it holds back below 5296 may see prices to fall further on today. Major support is seen at 5263 and 5214



Recommendations-MCX Crude Oil June: Buy at 5260 Target 5310 and 5370 Stop loss 5215

MCX Natural gas May (Daily Chart)






Technical Outlook:The daily stochastic have crossed over down which is a bearish indication. The stochastic 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.

Market is expected to remain positive and the resistance is seen at 477.70 levels. If market breaches477.70 may see prices to take further upside towards 481.90 and 484.60 however if it holds back below 470.80 may see prices to fall further on today. Major support is seen at 468.10and463.90

Recommendations-MCX Natural Gas June: Buy at 469 Target 474 and 480 Stop loss at 466

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