ALERT: YAMANI PREDICTS SPIKE TO $200-$300 IF UNREST IN SAUDI ARABIA ESCALATES.
 
PETROLEUM MARKET

Oil prices rose in the European session as buying interests emerged below 108. Buyers were motivated by worries that protests in Saudi Arabia may escalate. Former Saudi oil minister, Sheikh Zaki Yamani said at a conference that oil prices will surge to $200-300/bbl should serious unrest breaks out in the Kingdom. The Saudis have not experienced the cacophony as in Tunisia, Egypt or Libya. Moves by the US and Saudi Arabia in recent tensions in the Middle East and North Africa have raised worries about relations between the allies. Qaddafi loyalists pushed back rebels from the oil port of Brega as the opposition planned on exporting crude for the first time since February 15. Prices otherwise remained in a narrow range while market participants wondered if demand might wane in the US and China consequent to real or possible rate moves. The market anxiously awaits the EIA report, later this morning, hoping for a directional cue.

 
TECH TALK

Crude meanders through the familiar range again for a third day so the intraday bias remains neutral. Moving averages still depict a rising market and a buy signal is still active, although the averages are catching up. Even if momentum gathers on a downside break it will probably be supported near 103.00. Low volumes worry us and so a shake-out of the weak longs of anywhere between $1.00 and $3.00 for the remainder of the week is possible, especially if inventory reports contain any surprises.
 
 
NATURAL GAS

The downward spiral from the recent high above 4.50 continues now that it looks like Spring has finally sprung and not much of either cooling or heating demand can be expected for the next few weeks. NWS expects warmer-than-normal temperatures across most of the US Southwest and much of the East Coast through mid-April. Usage  typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning. EIA should report a 28 bcf pull from stocks tomorrow reflecting a late season burst of gas-heating demand. Additionally, Colorado State University's Tropical Meteorology Project and Weather Services International are all calling for anywhere between 15 -- 17 named storms, with three to five becoming major hurricanes, citing such factors as Atlantic Ocean water temperatures, a decreasing La Niña pattern, and even dust blowing in from Africa.
 
 
TECH TALK

Natural gas continues to stay in range of 4.195/4.48. Bias remains neutral. A convincing break of 4.195, implies that the run-up from  3.731 has been completed, and was, it turns out only a correction, meaning another assault on the prominent support band is at hand. Settlement below the 40-day moving average will signal that bias is again to the downside with the activation of a sell signal.

source: KilduffReport.Com