ALERT: PROTESTS IN SYRIA SPREADING; YEMEN PRESIDENT LIKELY TO STEP DOWN TOMORROW
 
PETROLEUM MARKETS

Crude attempted several times to break to the recent highs but eventually moved below $106.00 even as political unrest in the Middle East persisted. Demand for crude oil still needs to be balanced by a calculation of how much of the feedstock Japan requires after extensive refinery damage versus the need for rapid rebuilding against a backdrop that sees supply disrupted even while stocks remain ample for the world's largest user. Escalating protests in Syria and Yemen show the two-sided nature of the struggle and thus its unpredictability. In Libya, coalition fighter jets continue striking Gaddafi forces this week; although, rebels are finding difficulty in overcoming the regime's endless offensive. Futures have risen 23% since February 15, due to political conflict in the Middle East overwhelming the region as they turn more violent and thereby affecting demand on demand.
 

TECH TALK

The "M" top keeps tracing out and a significantly lower close on a Friday, may prompt more length than usual from being abandoned. Make no mistake we are not seeing a return to $60 or even $90 but $100 has a good chance of being challenged next week. In fact, even a move to the 10-day moving average at 102.20 might start a stampede of the bulls for the exits.
 

NATURAL GAS

Gas prices posted a seven week high in the early going yesterday. Later, EIA reported that only 6 bcf were pulled from stocks in the latest reporting period causing some recent length to be closed. Orders for durable goods unexpectedly fell calling into question the sustainability of industrial demand which might translate into increased gas demand. According to the Commerce Department, there a was a disappointing .9% drop in February. Additionally, normal or above-normal temperatures are likely across most of the continental U.S. from April 3 through April 7. This bull is running out of steam. April 1st is going to show some substantial reserves and it will be a couple of weeks more before cooling demand starts to appear in the Southwest. Failure to post a new high today may be reason enough to close out longs.
 

TECH TALK

The Chart turned bullish  with a nearly 17% rally in the front month after hitting a 3-1/2-month low in early March. But the inability to extend now makes the market look overbought, particularly because most of the move up was short covering rather than new length.  Prices did not extend too far past the 200-day moving average where there should have been an acceleration of momentum.
 

source: KilduffReport.Com