ALERT: BERNANKE SIGNALS GLOOM AHEAD AND IEA REACTS WITH RARE GLOBALLY COORDINATED RELEASE OF SPR OIL
 
PETROLEUM MARKET

Oil fell late in the NYMEX session yesterday in response to Fed Chairman Bernanke's comments yesterday caused the dollar to rise. He gave no signals of any further stimulus, which was reflected negatively on most commodities. The Chairman was quite grim in his assessment of near term US economic prospects, with growth revised lower and unemployment to slow only gradually, while price pressures have picked up slightly. Even though FOMC kept the benchmark interest rate unchanged growth expectations did not pressure the Feds to signal more stimulus to support the recovery. The central bank expects that the economy will grow between 2.7% to 2.9% this year, down from the previous expectations range of 3.1% to 3.3% just last April. It also cuts its 2012 growth forecast to a range of 3.3% to 3.7%. Central bankers raised their forecast range for the unemployment rate to average 8.6% to 8.9% in the fourth quarter of 2011, compared with the expectations of 8.4% to 8.7% in April. All rather disappointing for energy demand growth and making the current price structure look even more unsustainable.


TECH TALK

Crude oil has positioned a temporary bottom near 92.00 and the top of the range seems very close to the 96.00 we predicted at 95.70. needs to be posted. Yesterday's post settlement sell off, which has gathered downside momentum today has still not bested the week's low at 91.51 on Monday. Moving averages are arrayed to depict a falling market and there is an active sell signal. This may be all the bears are able to accomplish though with the approach of the long holiday weekend next week and month and and quarter end profit taking a very real possibility.  
 
 
NATURAL GAS

Forecast heat, unless it is of blast furnace intensity and lasts for weeks it is going to be hard to overcome the imbalances that has plagued gas for some time. Add to it, the Fed's gloomy predictions outlined by the Chairman yesterday and it is a prescription for falling prices. This is why prices were down yesterday after rising sharply in early trading. Additionally, heat is forecast for the long holiday weekend, where demand would naturally be lower with many businesses closed. Shorting should be a layup, but therein lies the rub. Markets become oversold very quickly causing violent episodes of short covering. Watch volume and open interest closely to try and gauge if new short positions are being opened. A surprise low build today could spark a round of buying. We think injections of 96 bcf will be reported which should weigh on the market especially with expiration and a long weekend coming.
 

TECH TALK

The chart is really looking bearish now. The 10-day is about to duck under the 40 and 60 day averages . The market shows inherent weakness with all price activity, so far today, below the pivot point at 4.353. Risk is to the downside with 4.522 resistance unbroken. The fall from 4.983 is still underway and should extend to near term trend line support at 4.22. A reversal above 4.522 will suggest that fall from 4.983 has complete and should flip bias back to the upside for retesting this resistance.

source: KilduffReport.Com