ALERT: MARKET STILL LOOKING FOR DIRECTION, BUT HOLDING NEAR HIGHS.
 
PETROLEUM MARKET

The markets seemed, earlier in the week, to see through the efforts of  global policymakers. Mob psychology has dominated, once again though, as market participants seem to take solace from movement closer to a deal on raising the US debt ceiling, tepid housing data and anticipation of a further drawdown of crude oil stocks. Endorsement came late in the day as API reported that crude inventories drew by 5.18MM/bbls in the week ended July 15. The dollar also lost  ground to the euro, suffering on the possibility that Moody's may cut the states credit rating, which would open the way to significant deterioration of the greenback and consequently, beneficial to oil prices. In Europe, finance chiefs came to no agreement regarding Greece, and the IMF warned of the contagion spreading to "core" countries. Despite relatively high valuations, oil prices struggle to make new highs. Whether this plays out as kinetic energy poised to burst higher or a sign that the bulls are losing control can not be determined right now. But in the final analysis, the question we continue to pose can still not be answered: when this is all concluded, what will come out of it that will be good for energy demand growth?
 
 
TECH TALK

Crude oil remains in its sideways trading pattern, ergo the bias stays neutral. Below 94.74 will flip bias back to the downside for a retest of 89.61. A break there will target key congestion in the 83.65/85 area. Conversely, a rally above 99.42 could generate enough momentum to test 102.44 and beyond that another potential run to the 115.00 level before a significant reversal can be staged. It is just that simple.
 
N.B. TODAY IS LAST TRADING DAY FOR AUGUST CRUDE OIL
 

NATURAL GAS

The market pared some of its gains on Tuesday, easing off a one-month high as market bulls began to look past the heat wave that has supported demand recently. The conclusion by sellers is that Monday's high more than accounted for the heat-induced ramp up in demand. Interestingly, gas is flowing to Mexico at a record pace as demand there provides an outlet for surging supplies that have battered prices lately.  Rising shipments to Mexico suggest that exports may keep expanding, and regulators are currently weighing multiple proposals to build terminals to liquefy gas to facilitate shipment to overseas buyers. This could also be behind the  Baker Hughes rig count which recently registered the the highest amount in six weeks and the third gain in four weeks. But for the immediate future, rising production levels and tepid economic performance should continue to weigh on prices.
 
 
TECH TALK

The intraday bias is skewed to the upside as prices extend well past the 13-day EMA and an endorsing formation seems to be developing. Excluding Monday's high as an overshoot, the highs from Friday, Tuesday and today, so far, along with their rising lows look to be forming an ascending triangle Its measure. at its widest part, represents a very small percentage of the move up off  the 4.064 low; conditions which usually presage an upside breakout. However the evidence is so small as to be inconclusive, but it bears watching. Recent high to low, 4.983 to 4.064, produces a 61.8% retracement calculation at 4.632, where fairly stiff resistance should be encountered.

source: KilduffReport.Com