ALERT: LIBYA HALTS ALL MILITARY ACTION, AGREES WITH UNRESOLUTION.

PETROLEUM MARKETS
 
Libya has apparently taken a second look at the power arrayed against it, with the UN declaration last night and news wires are just now reporting a ceasefire has been declared. In fact, prices have installed a new low for the day so far. Like Saddam used to, Qaddafi knows how to work the system dancing right up to the line at the last minute retreating. What does this mean? There may be no flying but that doesn't prevent a WW I style attritive conflict among countrymen, the bloodiest type of war. And more importantly for the oil market Libya's 2% contribution to the world market doesn't seem like all that much but it is when viewed against the backdrop of a diminution of Saudi reserves to make it up.
 

TECH TALK

Today's wild gyrations, so far, make today's chart inconclusive until the market settles down. Still, the overall look is bullish with prices right at the 10-day moving average, which also being on top presents an array depicting a  rising market. While the market waits to see how the latest developments play out, a flat-out breakdown is quite far off. A settlement below 96.22 would be required for that.
 

NATURAL GAS

A 56 bcf  drawdown of gas stocks, outstripping most estimates, and the possibility that Japan will use LNG as an alternative to idled nuclear power sent prices to their highest since early February.  Thursday's report from EIA showed total domestic gas inventories fell to 1.618 Tcf, which was just about where they were a year ago, which was heading for a record. If prices can rally off such weak influences when fundamentals carry the same structural imbalances they did just a day before says to us that shorts have finally thrown in the towel on breaking down below the 3.60-3.80 support zone. Additionally, temperatures in New York and Chicago should be mostly above normal for the next week or so, NWS also said that over the next 6-10 days, there should be above-normal temperatures across the South, as well. And finally, Baker Hughes data last week showed the number of rigs  fell to the lowest level in 13 months.
 

TECH TALK

The chart depicts a sharply rising market that has lost its overwhelmingly bearish look. The 200-day moving average has now become vulnerable and there is a very good chance of a settlement past it today which would be a extraordinarily bullish signal as it is used as an entry  or exit signal by many models. As it is though, the settlement past the 10 and 40-day averages activates an official buy signal. Shorts should absolutely be covered and initial length laid on.
 

source: KilduffReport.Com