ALERT: STOCKS SWELLING AT CUSHING. ADMINISTRATION DEBATES ARMING LIBYAN REBELS.
 
PETROLEUM MARKET

Crude oil prices stayed in a narrow range overnight as market participants sift competing influences for the next directional cue. Even though stocks at Cushing continue to swell, prices remain high with tensions in or near the oil producing regions of  the Levant. The New York Times reports this morning that the administration is now considering arming the Libyan rebels. At best, the playing field will be leveled for a grinding civil war, at worst it will mark the commencement of an ongoing debate on who to arm or not as unrest sweeps the region. Once the dust settles there will probably be plenty more oil producers with an excuse to deny product to the industrialized world that supported them or not. Overnight dollar/yen rose to almost 83.00 acknowledging  the markets acceptance of central bank resolve to keep yen weak during Japan's current crisis.
 
 
TECH TALK

The "M" top keeps tracing out with today's significantly lower low of 102.70. Prices should consolidate at the bottom of the "V" at the "M"'s middle in the 97.00-99.00 area, as prices approach 100.00 it will be time to square up so a pressure-free assessment of the next move can be made. Look at 100 as a basic floor for crude oil until the problems in the Middle East and North Africa calm down.  
 
 
NATURAL GAS

"Do not stay too long at this party, the music could stop abruptly, and those without a seat may have to give recent gains, and more, back." This is what we warned yesterday, but we never thought it would only take one day to bring it to fruition. True, expiration does bring some unusual twists and turns, but there is no ignoring the structural imbalances extant in the gas market that are going to take considerable time to turn around. In the meantime , look for established parameters to be respected. The market will struggle mightily to match old high. Until fall then, sell above 4.50 buy below 3.90, unless we have a suffocating summer. The first build of the season will be reported tomorrow when EIA posts one for the latest period of 3bcf.
 
 
TECH TALK

There was strong resistance from 4.496.  The breach of  support at 4.213 probably means that the move up from the lows earlier this month is over. This sets up another challenge to those lows and an optimal time of year for it to occur. Last night's settlement below the 4 and 9 day moving averages activates a sell signal, as well.

source: KilduffReport.Com