ALERT: EUROPEAN CREDIT HISTRIONICS OVER GREECE REACHING FEVER PITCH.
 
PETROLEUM MARKET

Quite simply, the directional divide for crude oil balances economic perception and geopolitics. The last six months have touched on both. The move up from the lows last fall was a reaction to the unrest spreading across North Africa and fears that it might spread to oil producing regions. This peaked at the 114.00 highs in early May as these troubles actually hit an oil producing state; Libya. Fortunately, their contribution to global production is not that great and the intervention of NATO would hasten a change of government. As attention was refocused on the global economy, examination of current data was not bringing about the quickening recovery that was promised by policymakers for this year, simultaneous with Chinese and Indian attempts to rein in inflation. The net effect has been a fall in crude oil prices of over $23.00 in just a little under two months time. It appears to us the the balance between these tow forces is forcing an equilibrium, of sorts right about where the market is currently trading.

 
TECH TALK

Crude oil stabilized near 92.00, even though the bias remains to the downside, it will be more and more difficult to make lower marks. 90.00 will take some time to break and may require several attempts because of its psychological importance. Prices are well below moving averages and there is key resistance at 93.81, basis August. Start to look for some profit-taking rallies, however these should be looked at as selling opportunities, as long as they do not extend appreciably past 94.00. A break of 90.00 on settlement should bring 88.00 in to play quickly.
 

NATURAL GAS

Even thought warmer than normal temperatures were forecast for the East Coast through the end of the month, it was not enough to blunt downward momentum. It is difficult to motivate buyers when structural imbalances threaten to worsen, as they must with dimming domestic economic prospects. Any improvement in industrial demand, upon which rising gas prices depend, are seemingly moving farther away, if recent data is to be believed. Record production and supplies perceived to be ample for summer needs can only lead to swelling stockpiles at the start of heating season. That being the case, it is hard to see 4.00 left unchallenged.
 

TECH TALK

The market broke down through the moving averages on Thursday, activating a sell signal. Minor support at 4.42 was breached with little difficulty. Currently the moving averages are arrayed to depict a rising market but with all three turning downward it should not take too many session for that to reverse. Intraday bias is to the downside and steeper declines should be expected. To the upside, a break of 4.522 points to 4.879 but the does not seem likely. On the downside, a break of 4.077 support will target 4.00 and the familiar 3.60- 3.80 support zone beyond.

source: KilduffReport.Com