ALERT:DOLLAR HAVING DIFFICULTY HOLDING; OIL MAY REBOUND AS GREENBACK COMES UNDER RENEWED ATTACK.

PETROLEUM MARKET

Oil has moved lower today ahead of the release of EIA report later this morning, which is expected to show crude oil inventories decreased to 2MM bbls from 6.1MM bbls the previous week. Prices dropped over the last in the two sessions mainly on a rebound in the dollar which lessened the allure of dollar denominated commodities. More importantly, it would appear that concerns are growing that the global recovery looks to be waning, with US growth softening and Chinese monetary policy tightening. A retreat should be contained by 108.00, at least initially. This is the point where prices took off on the last leg higher on the worsening Libyan situation. Turbulence in the oil producing regions have not lessened appreciably and this has also proved supportive of oil prices of late as well. There may be participants who are trying to take advantage of a seasonal play as stocking and refinery utilization peaks ahead of the driving season.


TECH TALK

The bias for crude will have to be negative today with the posting of a new low for the current move at 110.15. Prices have recovered by $1.00 since that early morning posting mostly on the dollar coming under pressure again. The chart has taken on some bearishness with the market dropping under the 10-day moving average as of last night's settlement. This extinguishes  the active buy signal. Moving averages are still moving higher and are arrayed to depict a rising market, which is positive. What happens between 110.15 and 10983, is the critical point for direction. If it holds then the market may mount another assault on the recent highs, if not then 108.00, 105.00 and finally 98.00 are successively vulnerable.


NATURAL GAS

There were 32,402 megawatts of nuclear generation down for maintenance on Tuesday; more than 11,000 MW above average, so the large number of nuclear plants shut for spring refueling and maintenance continues to support gas prices. New buying is coming into the market, as well, evidenced by the jump in open interest by about   65,000 contracts, or 7%, in the previous three sessions to a record high 992,434 on Monday. Still, the inability of the market to break above the high from last January has prompted some profit taking. Hardly surprising since forecasters expect Northeast and Midwest temperatures to mostly average below normal this week, but daytime highs in the mid-60s Fahrenheit area are not likely to generate much load.
 
 
TECH TALK

The chart has posted a temporary top at 4.729, and although prices are still running ahead of the moving averages, most price action has taken place below the pivot of 4.679 showing the front end weakness. The bias has turned neutral for the moment and some consolidations could be seen now that the target, the mid-January high of 4.879, is in sight. Any selling should be contained by the 10-day moving average. A move above 4.739 will target 4.879 key resistance next.

source: KilduffReport.Com