ALERT: QADDAFI AIR ASSETS NOW BOMBING BENGHAZI. HIS SON,SAIF-AL-ISLAM CLAIMS  WAR WILL BE OVER IN 48 HOURS.
 
PETROLEUM MARKETS

The chore now for oil market participants will be to parse how much significance to give to several competing influences. Consideration that a fair portion of an important, energy using, industrial country's GDP has been torn asunder will have to be taken as negative for prices as is evidenced by the $8.00 fall subsequent to the event. The response to events in Libya initially carried prices to just about where they are now. Add to it that there has been a martial escalation in Bahrain that includes the Saudis and the risk/fear factor is solidified. US economic data has some positive elements. A nudge higher in CPI shows that aggregate demand may be slowly rising, a view bolstered somewhat by fewer numbers filing for initial jobless claims. Weigh it all up we will still have to give the nod to our short term, across the board bullishness. But as events unfold in Japan or even in the Middle East, for that matter, reversals could come quickly.
 
 
TECH TALK

Despite our short term bullish view the chart gives a picture of a market losing upward momentum now that prices have fallen below the 10-day moving average, the averages are still arrayed to depict a rising market. In fact, there is a discernible downtrend developing, but its slope is not very steep and you can see by the recent bar today's range alone covers almost the entire channel. A breakout today would require a 101.91 or 96.60 settlement.


NATURAL GAS

Prices  halted their advance yesterday after moving higher for several consecutive sessions as the approach of milder weather trumped concerns over increased Asian LNG imports which are expected to rise dramatically as Japan seeks to replace lost  nuclear generation. The US does not import much itself nor is it capable of exporting much either, some have reached a conclusion that crowded buying might be partially offset by purchasing paper btus, adding a little color to what has been a range-bound market Structural imbalances will remain and the effects of Japan's catastrophe will probably be temporary and relatively insignificant. Stockpile levels will need to be monitored closely, not only to seer if there is any Japanese effect, but also to see how much more the onset of naturally lower seasonal demand has on a year of disappointing demand. Barring a panic driven closing of nuclear facilities in the US for inspections, gas should see upward momentum dissipate quickly in the 4.10-4.25 area.
 

TECH TALK

After a harsh winter, gas demand peaked out in late January (large circle). Even though there was more harsh weather to come, the calendar started to work against the market, with a brief  exception in late February. This last leg down reached its nadir in early March. After a lengthy consolidation period of about a month, it looks like the market is etching out a rounded bottom, assisted the last few days by the Japan effect, real or imagined. You can see how the 10 day moving average is starting to turn upwards, even though the averages are still arrayed to depict falling prices, now that the market has run ahead of it extinguishing an active sell signal. If there is a settlement above 4.00 shorts should be liquidated, but wait for a settlement above the recent high of 4.10, posted on February 28th to start thinking about acquiring length.

source: KilduffReport.Com