energy intraday

Energy
08 May 2008 09:40:22

Major Headlines:

Crude oil futures made a record high at above $123 a barrel after a U.S. government report showed inventories rose to the highest in eight months.

Crude oil may reach $125 a barrel this week because of concern over a supply shortage before the peak U.S.summer driving season, Libya's top oil official said. There is no shortage of supply now, there is concern that there may be one and it may go to $125 by Friday,'' Ghanem, who heads Libya's National Oil Corp., said yesterday



Output from Nigeria declined 160,000 barrels to 1.88 million barrels a day last month, the lowest since August 1999,according to a Bloomberg News survey of oil companies, producers and analysts. The country slipped to being the seventh-largest producer, from six-largest, in the Organization of Petroleum Exporting Countries.

OPEC pumped an average 32.105 million barrels of crude oil a day last month, down 320,000 barrels from March, the survey showed. Supply shortfalls may send oil to between $150 and $200 a barrel within two years, Goldman Sachs Group Inc. analysts, led by Arjun N. Murti, said in a report two days ago

Most analysts predict the growing level of demand from China will keep the price elevated, at least over the $US100-a-barrel mark, particularly as there are no signs supply is going to be increased



BHP Billiton Ltd., the world's largest mining company, said its oil and gas business is a ``strong fit'' with its metals operations and unique among units for yielding consistent returns.
Average daily oil and gas production was 378,000 barrels of oil equivalent last month, up from 318,000 barrels in the 2006 financial year



Natural Gas also advanced amid speculation a government report today may show stockpiles rose less than the average for this time of year.



The National Weather Service was predicting below-normal temperatures across almost the entire northeast and Midwest from May 13 to May 21, but the weather wasn’t expected to be cold enough to spark significant demand for natural gas For heating.



There should also be a continuation of below normal temperatures in the Upper Midwest, Great Lakes, and eastern Canada for the six- to ten-day period

MCX Crude Oil 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 5130 levels. If market breaches 5130 may see prices to take further upside towards 5180 and 265 however if it holds back below 4995 may see prices to fall further on today. Major support is seen at 4910 and 4860

Recommendations-MCX Crude Oil May: Buy at 5040 Target 5095 and 5165 Stop loss 4990



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 470.60 levels. If market breaches 470.60 may see prices to take further upside towards 475.30 and 482.60 however if it holds back below 458.67 may see prices to fall further on today. Major support is seen at 451.30 and 446.60

Recommendations-MCX Natural Gas May: Buy at 463 Target 470 and 482 Stop loss at 456

MCXARUN
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basemetals intraday

Base Metals
08 May 2008 09:44:55



Major Economic Data:

The U.S. Labor Department said that worker productivity was up an annual rate of 2.2% in the first quarter, better than expected. Unit labor costs were up an annual rate of 2.2% in the first quarter, down from a 2.8% annual gain in the fourth quarter.

There is no encouragement for the housing industry here - the National Association of Realtors said that the pending home sales index was down 1.0% in March and down 20.1% from a year ago. Surprisingly, July lumber is steady to higher.

Copper

Copper dropped for the second straight day on concern a 26 percent jump in prices this year will curb demand fromChina, the world's largest user of the metal. MCX Copper June traded mixed and remained weak for the day following international movement at LME and COMEX.

Copper rose to a record two days ago inNew York as labor unrest and falling inventories spurred supply concerns. Usage in China fell 1.3 percent in January from a year earlier, the International Copper Study Group said last week, and higher prices pose a ``risk'' to consumption, Freeport-McMoRan Copper & Gold Inc. has said.

Contract workers atChile's state-owned Codelco called off the strike after the market closed on May 5, and the company said two mines restarted production. The company'sEl Salvador mine remains closed today, the company said.

Chile's state-owned Codelco, the world's biggest copper producer, said itsEl Salvador mine remains shut for an evaluation of damage to equipment after a 20-day strike.

Copper production inZambia,Africa's largest producer of the metal, rose 6.9 percent in March, the Bank of Zambia said, without providing a reason for the increase.

Output climbed to 43,892 metric tons in the month, from 41,062 tons in the same period a year earlier, the central bank said in a report today in the capital,Lusaka. Exports declined to 38,872 tons, from 46,085 tons, it said.

The index of pending home sales fell 1 percent to 83, following a 2.8 percent drop in February that was larger than previously reported, the National Association of Realtors said today inWashington.

Copper warehouse stock at LME, net change was -625 MT to 109025 MT

MCX Copper June - Technical Outlook:

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.

Market is expected to remain negative and the support is seen at 345.1 If market breaches below 345.1 may see prices to take further correction towards 342.9 and 340.3 However if it holds back above 349.8 may see prices to rise further on today. Major resistance is seen at 352.4 and 354.6

Recommendations-MCX Copper June: Buy at 345 Target 351 and 354 SL 342.10



Nickel

MCX Nickel May traded weak following movement at LME, while correction in Bullion and weak copper prices also supported the move.

Nickel warehouse stock at LME, net change was -144 MT to 51234 MT

MCX Nickel May -Technical Outlook:

The daily stochastics have crossed over up which is a bullish indication. The stochastics 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 1180.5 levels. If market breaches 1180.5 may see prices to take further upside towards 1196.5 and 1213.0, however if it holds back below 1148.0 may see prices to fall further on today. Major support is seen at 1131.5 and 1115.5

Recommendations:MCX Nickel May: Buy at 1160-55 Target 1178 and 1184 SL 1148


Zinc

MCX Zinc May traded mixed on LME hints, market initially pushed up on LME Inventory data but correction in Bullion and weak copper prices pushed market down. Although movement was much tight in range of 91.85 – 93.75

Zinc warehouse stock at LME, net change was -1525 MT to 125350 MT

MCX Zinc May -Technical Outlook:

The daily stochastics have crossed over up which is a bullish indication. The stochastics 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 93.4 levels. If market breaches 93.4 may see prices to take further upside towards 94.5 and 95.3, however if it holds back below 91.5 may see prices to fall further on today. Major support is seen at 90.7 and 89.6

Recommendations-MCX Zinc May: Buy at 92 Target 94 and 96 Stop loss at 91.05



Lead

MCX Lead May traded was down by almost 5%, following international movement while correction in Bullion and weak copper supported the movement. Heavy stock in in LME warehouse pushed market more down.

Lead warehouse stock at LME, net change was 625 MT to 58825 MT

MCX Lead May -Technical outlook:

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.

Market is expected to remain negative and the support is seen at 98.3 If market breaches below 98.3 may see prices to take further correction towards 96.2 and 92.6, However if it holds back above 104.1 may see prices to rise further on today. Major resistance is seen at 107.7 and 109.8

Recommendations –MCX Lead May: Sell at 102 Target 99.20 and 98 SL 103.50



Aluminium

MCX Aluminium may traded weak and was down by almost 1% following international market. Market was pushed down mostly because of bullion, Copper and Lead prices.

Aluminium warehouse stock at LME, net change was 2950 MT to 1039275 MT

MCX Aluminium May -Technical outlook:

The daily stochastics have crossed over up which is a bullish indication. The stochastics 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 120.0 levels. If market breaches 120.0 may see prices to take further upside towards 121.2 and 122.0 however if it holds back below 117.9 may see prices to fall further on today. Major support is seen at 117.1 and 115.9

Recommendations–MCX Aluminium May: Buy at 118-118.50 Target 120 and 121 SL 117.10

MCXARUN
9994500540

bullion intraday

Bullion
08 May 2008 09:37:41



Gold prices turned lower overnight as the US dollar took another forward step on the index, bolstered by inflation combat comments from K.C. Fed Pres. Thomas Hoenig and by credit crisis related observations from the Treasury's Henry Paulson. The greenback is approaching 60-day highs on the index and today's ECB meeting is expected to yield no change in interest rates.



Gold fell in London as the dollar rose against the euro, diminishing the metal's appeal as a hedge against declines in the U.S. currency. Platinum also slipped. Gold has moved in the opposite direction to the dollar this year, with the metal up 5 percent and the dollar down 6 percent against the euro and yen.



The range at the moment is between $850 and $880 with a firm break above this leading to higher prices.



Ukraine's foreign currency and gold reserves rose in April as the value of exports from the former Soviet republic increased. Reserves advanced 0.4 percent to $33.38 billion in April from $33.23 billion a month earlier, the country's central bank said yesterday



Switzerland's central bank may have increased gold sales 33 percent in April to 13 metric tons (417,960 ounces) compared with the prior month, Bullion holdings fell to 32.85 billion Swiss francs ($31billion) in April, from 33.27 billion francs a month earlier, Sales totaled 313,220 ounces (9.74 tons) in March, bringing the average since the end of September to about 11 tons a month



Silver use in industrial applications reached a record last year as overall demand fell and mine output rose, according to researcher GFMS Ltd.Industrial demand for silver use in electronics and in chemical catalysts rose 7.2 percent to 455.3 million ounces (14,200 metric tons) last year from 2006,



Total demand fell 2.1 percent to 894.5 million ounces in 2007, while mine production increased 3.6 percent to 670.6 million ounces. India, China and the U.S. accounted for 70 percent of the rise in industrial use of silver



Total jewelry demand fell 1.7 percent to 163.4 million ounces, the lowest since 1999, as wide price fluctuations discouraged purchases, the report said. Demand fell 8.5 percent to 25.8 million ounces in Italy, the second-biggest user of the metal for jewelry after Thailand, as consumer spending slowed



U.S. Economy:

The U.S. Labor Department said that worker productivity was up an annual rate of 2.2% in the first quarter, better than expected. Unit labor costs were up an annual rate of 2.2% in the first quarter, down from a 2.8% annual gain in the fourth quarter.

There is no encouragement for the housing industry here - the National Association of Realtors said that the pending home sales index was down 1.0% in March and down 20.1% from a year ago.

Currencies update:

Record high oil prices were seen reinforcing the European Central Bank's focus on inflation, which bank President Jean-Claude Trichet on Monday termed a "significant" risk. This underlined expectations that the ECB would keep rates at 4% when it meets on Thursday. Analysts expected the ECB to stick with its hawkish line on inflation in Trichet's post-meeting briefing on Thursday, despite a recent run of soft data.

AudUsd rose 0.37% to 0.9496, having retreated from a two-week high after the Reserve Bank of Australia held its key cash rate at a 12-year high of 7.25%.

MCX Gold 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 11675 levels. If market breaches 11675 may see prices to take further upside towards 11730 and 11800 however if it holds back below 11550 may see prices to fall further on today. Major support is seen at 11480 and 11425

Recommendations–MCX Gold June: Buy at 11545 Target11670 and 11720 Stoploss at11495



MCX Silver July

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 22716 levels. If market breaches 22716 may see prices to take further upside towards 22933 and 3140 however if it holds back below 22292 may see prices to fall further on today. Major support is seen at 22085 and 21868

Recommendations-MCX Silver July: Buy at 22410 Target 22610 and 22750 Stop loss at 22270

MCXARUN
9994500540

GENERAL MARKET CONDITIONS

U.S. business bankruptcy filings in April increased 49% from a year earlier, the biggest gain so far this year, as the slowing US economy prompted more companies to shut down. Signs of distress, such as bankruptcies and foreclosures, are rising as economic growth has slowed to its weakest pace since the last recession in 2001. Foreclosures and bankruptcies alike are rising as falling home prices make it harder for those in the U.S. to refinance before adjustable-rate mortgages reset. Median prices for existing homes fell in 22 metropolitan areas in February, down 7.70% from a year earlier. Business gloom along with higher commodity prices is eating into real income. As long as this continues gold will maintain its medium term bullish trend. The US dollar will benefit as other countries/economic zones also slowdown due to higher commodity prices and firm interest rates.

There is hardly anything to comment on metals as crude oil prices seem to be dictating everything. The US dollar is off yesterdays lows but still not out of the woods yet. Markets will be looking forward to the European Central bank meeting (ECB) and bank of England meeting for direction. If the ECB explicitly says that they will raise interest rates to ward off inflation then there will be another round of gains for the euro. If the ECB says that higher commodity prices along with a stronger currency is hurting growth then there will be another round of sell off in euro.

SILVER -- JULY FUTURE -- INTRA DAY PIVOT $1712

Intra day as long as $1666 holds downside will be limited and silver will target $1728 and $1772. A consolidated fall below $1666 will result in $1636 and $1600.

INDIAN RUPEE (USD/INR)

The Rupee weakened to new seven month low of 40.98 yesterday on the back of a continued rise in the crude oil price and volatile stock markets. A weaker rupee will only add to inflationary pressure. The Reserve Bank of India’s (RBI) stance on the rupee will be crucial at this juncture as the sole aim of the government in an election year is to control headline inflation. In 2007 a stronger rupee had a role in controlling inflation. Markets will be looking forward to clues on RBI intervention to check rupee weakness through state run banks. In our view RBI should be happy to intervene as intervention takes away excess liquidity from the money markets. Technically 41.18 is the key medium term resistance and only a close over 41.18 for three to four consecutive days will result in another round of weakness else the rupee will have topped out and near 40.25 once again.



HAPPY PROFITABLE TRADING


MCXARUN
9994500540