ALERT: GREEK AUSTERITY ONLY BEGINS WITH LEGISLATIVE APPROVAL.
 
PETROLEUM MARKET

The market took a ripples from the Greek debt crisis are muddling financial markets that are chasing the sunrise around the globe. What will the Greeks do? How will markets react to their decision. The immediate hope is that the Greek parliament will pass a package of austerity measures leading to a broad plan with European Union guarantees to rollover Greek debt. But with workers already flooding the streets in protest, it is difficult to see how any plan can be successfully implemented. The possibility that a plan will be enacted helped the euro at the expense of the dollar which in turn lifted crude prices. In the final analysis though it is hard to produce a scenario that works out as being positive for energy demand growth. There may be some  initial relief buying but it will be short lived. Greece is only the tip of the iceberg. On the other side of the world the Chinese are struggling to hold inflation in check and the net effect there will be negative for energy demand growth, as well. We are not predicting a price collapse, but the fall from 114.00 is still not completed.
 
 
TECH TALK

Crude oil has fallen into a very tight range as the uncertainty surrounding several factors can not be reliably judged. The bias will have to be given to the downside as the fall from 114 looks to be ongoing. There does seem to some support at the mid-90 level having stopped there three days running. However, that will begin look like a very firm temporary base longer it remains unbreached. Prices are still below the moving averages, so there is an active sell signal. Market does feel and look heavy near its highs but with so many deadlines in the next few days, and especially before a long weekend, don't be surprised by a bout of profit taking.
 
 
NATURAL GAS

Gas ended higher yesterday, a consequence of technical buying ahead of option expiration today and contract expiration tomorrow. The thermometer ticks upward for the next several days bringing some additional demand, it will not be enough to reverse the market. Along with the weight of ample supply, the market now also has to contend with possible fallout from the spreading European debt contagion. As Chairman Bernanke stated in his remarks last week, the consequences for the US could be dire and this will certainly have a negative impact on the  industrial demand for gas, upon which a formidable portion of its value weighs.
 

TECH TALK  

The market is short and covering ahead of settlement. The market has shed a considerable portion of its values, almost 12% over the last week and a half or so. Along the way it has broken key technical support, as well. Still, holding support at the longer term trendline and the 200-day moving average, near 4.15, , shows some inherent strength and must be rather disconcerting for the shorts. So a settlement below that mark will probably be required to generate enough downward momentum to threaten 4.00 again. Still it is a grossly over sold market with relative strength in the 30s.

source: KilduffReport.Com