energy intraday

Energy
23 May 2008 10:35:10



Energy

Major Headlines:

Oil soared on Thursday, hitting new record highs above $135 per barrel on both sides of the Atlantic before turning lower on a combination of profit-taking and a bounce in the dollar

Oil prices have soared by over 30 percent since the beginning of the year, extending a long-term rally that has seen prices more than double since the beginning of 2007, as market players weigh rising demand against concerns over production rates.

The price surge over the last two sessions followed a surprise drop in U.S. fuel stocks inventories in the weekly report from the Department of Energy, sparking further supply fears. U.S. crude oil inventories plunged by 5.4 million barrels, confounding market calls for a modest rise. Gasoline stocks also fell sharply, down by 800,000 barrels against predictions for a small weekly decline ahead of the driving season

Expected strong diesel demand from China after the Asian nation suffered a devastating earthquake last week and higher gasoline purchases from the United States ahead of the summer driving season have also boosted crude. On the supply side, ministers from the OPEC have indicated any output increase from the cartel remains unlikely, as it continues to blame record prices on speculation, geopolitical factors and the dollar's decline, rather than a lack of crude in the market.

The news was particularly market-sensitive, coming days ahead of the U.S.Summer-holiday driving season that kicks off this weekend for the Memorial Day holiday on Monday.

Americans have begun buying less gasoline as prices at the pump hit new highs. The change in driving habits is raising concerns about a slowdown in consumer spending, the main engine of the world's biggest economy.

The rapid surge in oil prices came as the U.S. Federal Reserve slashed its 2008 growth forecast for the U.S. economy, the world's biggest oil consumer. The Fed on Wednesday slashed its forecasts to a range of 0.3 to 1.2 percent, from its prior forecast of 1.3 to 2.0 percent in January. The central bank cited higher oil prices as a key factor weighing on momentum.

Natural gas in storage in the U.S. rose last week but is 0.2 percent below the five-year average for this time of year, The Energy Department's Energy Information Administration said in its weekly report that natural-gas inventories held in underground storage in the lower 48 states rose by 85 billion cubic feet to more than 1.61 trillion cubic feet for the week ending May 16.

MCX Crude Oil June

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 5789 levels. If market breaches 5789 may see prices to take further upside towards 5907 and 5993 however if it holds back below 5585 may see prices to fall further on today. Major support is seen at 5499 and 5381

Recommendations-MCX Crude Oil June: Sell at 5750 Target 5680 and 5610 Stop loss 5790

MCX Natural Gas May

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 518.67 levels. If market breaches 518.67 may see prices to take further upside towards 524.33 and 534.67 however if it holds back below 502.67 may see prices to fall further on today. Major support is seen at 492.33 and 486.67

Recommendations-MCX Natural Gas June: Buy at 507 Target 511 and 515 Stop loss at 503