ALERT: GREEK DEFAULT PROBABLY INEVITABLE.
 
PETROLEUM MARKET

It now looks like prices may be on a technical mission to post what should be the upside of a coming sideways consolidation between 92.00 and 96.00. The focus is still Greece, even though it is trying desperately to initiate tough new austerity measures to keep international funding coming a default (even if it comes as a restructuring) seems inevitable. No matter what policymakers comer up with it will either be politically impossible to implement or will bring even more indebtedness. Oh yes, there will be a spillover effect. So the directional divide rest on a fulcrum that falls between economic contraction an constricted demand, or natural Q3 demand growth as the consuming nations prepare for the historically high demand season. It will be interesting to watch that particular tug of war plays out in participants' psychology. While these parameters are not set in stone, 92.00-96.00 could prevail through the summer.
 

TECH TALK

Crude oil has positioned a temporary bottom near 92.00 and now the top of the range needs to be posted. It looks to be about 96.00. this would be reflective of a congestion zone from late 2010, early 2011 and would make a head and shoulders on longer term charts. In the shorter term, prices remain below the moving averages so that means there is still an active sell signal. They are pointing down and are arrayed to depict a falling market. However, prices have broken through first resistance and secondary resistance at 93.00 and 04.50 respectively, which suggest some inherent strength.
 

NATURAL GAS

Gas continued its losing streak yesterday, posting a new low at 4.279 for the current move. 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. Similarly, even though Baker Hughes reported that the number of drilling rigs fell last week for a second consecutive week, the pace of activity is still at a level leading to increased output, and is expected to grow. Additionally, the market still has room to move down because there is ample supply  to meet demand from almost every conceivable meteorological condition, given the 2.256 Tcf currently stored. Look for some bargain hunting below 4.30, which should be short lived.


TECH TALK  

The presents the market's inherent weakness; looking decidedly bearish. Prices have dipped below the moving averages, activating a sell signal, and even though they are still arrayed to depict a rising market their direction has reversed sharply. With each consecutive down day the probability of another lessens, as well. Prices piercing resistance at 4.324 shows the front propensity for short-covering, but secondary resistance at 4.369 is still intact. A break of 4.522 would be required to declare a trend reversal, but current momentum should be to weak to carry that far.

source: KilduffReport.Com