ALERT: OPEC WILL NOT INCREASE PRODUCTION, SAYS SUPPLY SUFFICIENT.

PETROLEUM MARKETS

Hints that OPEC was considering a boost in official production quotas and also clamoring by the Congress for an SPR release took some of the upward momentum out of the oil market yesterday. As of yet no extraordinary OPEC session has been called and remarks by presidential economic advisor, Austen Goolsbee left the impression that an SPR release was not imminent. Reuters is reporting though that heavy fighting has shut down the Zawiyah refinery in Libya, which sent prices back up to a new high for the day, before retreating. Last night prices displayed little reaction to crude stockpiles swelling 3.8MM bbls, according to the latest report by API. EIA is expected to endorse the inventory growth when it reports, later this morning, a 1.4MM bbl gain. But Libya will certainly be participants' main focus for a while. President Obama and Prime Minister Cameron conferred yesterday and in a non-decision decision, agreed to " press forward with planning.....on the full spectrum of possible responses." Good show!
 
 
TECH TALK

The chart seems to be implying that there is a rough equilibrium at 105.00, where prices seem to be coalescing. Otherwise, it has an overwhelmingly bullish look with prices well past the 10, 40, and 200-day moving averages and maintaining itself above first support for today at 104.70, the one violation in overnight trading being quickly made up. There is still a small gap that needs to be filled but that is quite far away between 95.14 and 94.49. Given the nature of this market there is also the appearance of a gap down which would create an island top which would be very bearish. Keep watching the news for a surprise settlement of the current situation.
 
 
NATURAL GAS

Gas prices dipped again yesterday as short covering ran out its momentum. There is just no way of not acknowledging that the market is oversupplied and that this is a structural defect that is going to be corrected only over a lengthy period. Prices will be buffeted by news and weather but this one fact can not be ignored. Certainly two months of extraordinarily harsh winter conditions in the high consumption regions and a spate of positive economic data has held prices from slipping to 3.00 but now that low demand spring is around the corner, there is not going to be a lot of help for prices until cooling load kicks in. Short covering should not be able to generate enough momentum to carry past 4.25 so look on that potential window as a selling opportunity.
 

TECH TALK

The technical outlook is losing some of its bearish cant as prices ride right along the 10-day moving average line. Last night's settlement violated it again so the sell signal is reactivated. Additionally, besides being below all the major moving averages, prices action so far has all been below today's pivot point of 3.887 so the market is tactically and strategically weak. We would not advise opening fresh shorts though until there was a settlement below the recent low of 3.731, posted Monday.

source: KilduffReport.Com