energy intraday

Energy
06 June 2008 12:40:18

Major Headlines:

Oil prices jumped Thursday after the dollar fell in response to comments by European Central Bank President Jean-Claude Trichet suggesting the bank could raise interest rates. At the pump, meanwhile, gas prices rose to a new record near $3.99, and are likely to hit $4 soon.

Trichet spoke after the ECB left a key interest rate unchanged amid concerns about inflation. While Trichet said a change in rates was not a certainty, he said some of the bank's governors favor an increase. When interest rates rise in Europe, or fall in the U.S., the dollar tends to weaken against the euro. Many investors buy commodities such as oil as a hedge against inflation when the dollar is falling. Also, a weaker greenback makes oil less expensive to investors dealing in other currencies.

Oil prices ticked higher on bargain hunting after sharp losses Wednesday but fears of lower demand and some potential for the dollar to rise further capped gains. Oil plunged Wednesday to its lowest price since May 15 on fears of lower global demand after recent record prices and as the U.S. reported some of its fuel stocks rose above expectations last week, in a weekly report. Oil is now 9 percent lower than a peak $135.09 hit May 22.

The key demand forecasts from OPEC, the International Energy Agency and the U.S. Department of Energy will be closely watched to monitor the impact of record prices on buying. Meanwhile, global demand looks likely to take a hit, as India has raised petrol and diesel prices, following in the footsteps of Indonesia, Taiwan and Sri Lanka who announced subsidy cuts recently.

Elsewhere, the U.S. currency's recent run higher is also limiting the appeal of dollar-priced oil, and that could well continue with growing speculation the U.S. Federal Reserve may even hike interest rates at the end of the year.


Natural gas in New York advanced amid speculation the warmest weather so far this year in the regions of highest gas use would spur demand. Temperatures as much as 14 degrees (8 Celsius) above normal are forecast for parts of the Midwest and Northeast and linger through June 12.

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 105 billion cubic feet to nearly 1.81 trillion cubic feet for the week ending May 30.The inventory level was slightly below the five-year average, and well below last year's storage level of more than 2.13 trillion cubic feet, according to the government data.


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 sideways and the resistance is seen at 5410 levels. If market breaches 5410 may see prices to take further upside towards 5452 and 5489 However if it holds back below 5267 may see prices to fall further on today. Major support is seen at 5184 and 5123

Recommendations-MCX Crude Oil June: Sell below 5450 Target 5360 and 5300 Stoploss 5490

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 534.60 levels. If market breaches 534.60 may see prices to take further upside towards 541.30 and 545.60 However if it holds back below 521.60 may see prices to fall further on today. Major support is seen at 519.30 and 513


Recommendations-MCX Natural Gas June: Buy at 526 Target 532 and 540 Stop loss at 522


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