energy intraday

Energy
04 June 2008 10:57:26

Energy June 04 2008

Major Headlines:

Oil fell steeply to trade beneath $126 a barrel on Tuesday due to concerns over slowing demand and a sharp rebound in the dollar, which came after the U.S. Federal Reserve warned that the weak greenback had fuelled inflation in the world's number one energy consumer.

Oil prices fell Tuesday after Federal Reserve Chairman Ben Bernanke indicated that more interest rate cuts are unlikely, comments that sent the dollar higher and raised questions about oil's ability to reach new highs in the short term. Gas prices rose slightly to a new record near $3.98 a gallon.

In a speech to an international monetary conference in Spain, Bernanke suggested that further rate cuts are unlikely because of concerns about inflation. Since last year, a series of Fed cuts designed to shore up the economy has led to a protracted decline in the dollar's value against the euro. That helped feed the record run-up in oil prices as investors bought commodities such as oil as a hedge against inflation.

Kuwait's Oil Minister Mohammad al-Olaim said on Tuesday that the Organization of Petroleum Exporting Countries was prepared to pump more oil if the market needs it.
"OPEC is prepared to increase supplies only if the market needs it," Olaim said in statements reported by the official KUNA news agency.

Oil fell on fears of lower demand as the global economy remains weak and as investors continue to book profits amid some speculation prices may not extend their record breaking rally. There was some support, however, from supply fears during the Atlantic hurricane season, a weak dollar and ongoing tension between major producer Iran and the West.

Today, the United States will release weekly energy inventory figures which are likely to provide more direction. Seasonally, the world's biggest energy consumer's gasoline demand should be rising during the summer driving season but some analysts reckon such purchases may not be as high this year because of the credit crunch.

NYMEX July natural gas is trading at new contract highs with hot temperatures in the forecast for much of the U.S

Natural Gas supply to Western Australia is expected to be disrupted for days after an explosion on Tuesday at an offshore plant which supplies 30-40 percent of the state's domestic gas needs, the operator of the plant said.

Apache Energy, a unit of U.S.-based oil and gas producer Apache Corp (APA.N), said it had notified the government of the blast along with those customers affected, but it did not immediately provide details on how much supply would be curtailed or identify the users facing delivery cuts.


MCX Crude Oil June - 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 negative and the support is seen at 5306 if market breaches below 5306 may see prices to take further correction towards 5260 and 5192 However if it holds back above 5420 may see prices to rise further on today. Major resistance is seen at 5488 and 5534

Recommendations-MCX Crude Oil June: Sell at 5410 Target 5340 and 5260 Stoploss 5460


MCX Natural gas June - 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 527.80 levels. If market breaches 527.80 may see prices to take further upside towards 534.10 and 542.30 However if it holds back below 513.30 may see prices to fall further on today. Major support is seen at 505.10 and 496

Recommendations-MCX Natural Gas June: Buy at 516 Target 520 and 527 Stop loss at 512


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