ALERT: OIL MAINTAINING STRENGTH ON DOLLAR WEAKNESS.
 
PETROLEUM MARKET

Disappoint Q1 GDP data has caused investors to -abandon the dollar, and exert upward pressure on crude oil. Additionally, investment banks have also renewed their predictions of higher oil prices. However, risks remain high. The key issue is the ongoing credit crisis in Europe. Jean-Claude Juncker, said the IMF may not deliver the 5th tranche of its loans to Greece. If this worry materializes, Greek debts may need to default, particularly as opposition to any sort of bailout is rising. Netherlands has already stated that it would not agree on more aids to Greece. If these comments were to pressure Greece and other countries in jeopardy in accelerating austerity measures to reduce deficits, it can hardly be good for energy demand growth.
 

TECH TALK

Yesterday's price action certainly edges the bias more towards the bullish case. Still, all the last several bars  have done is take away from the bear pennant formation. Prices are a long way from generating an actual buy signal, basis the moving averages. But the market is running ahead of the support at 100.58. With trimmed volumes as a consequence of the holiday, it will be difficult to generate enough momentum to threaten resistance at 102.50.
 

NATURAL GAS

Even though the EIA report showed injections much higher than expected, and the June contract was pressured ahead of expiration, yesterday's session did not surrender all that much ground. Higher cooling load expected into next week probably kept the market buoyed. However, with lower weekend demand, particularly as this is a holiday, nuclear units coming back on line, this phenomenon could be short-lived. Successive rig declines, depicted by Baker Hughes, hold the hopes of some that output may begin to decline from record levels, but for the moment the structural imbalances that have persisted for some time will hold prices in check.
 
 
TECH TALK

The chart shifts back to neutral as moving averages begin to converge. The recovery off the recent 4.077 has now posted 4.414 before reversing. Holding above today's pivot shows some inherent strength, and another reversal back up to 4.729 is very possible. However, the tepid volume and falling open interest of late suggests that upward momentum could give out at any moment, which is why we still think selling 4.65 calls may turn out to be rather prescient.

source: KilduffReport.Com