ALERT: THIS IS IT FOR EUROPEAN AND US POLICYMAKERS.
 
PETROLEUM MARKET

The moment has arrived for global policymakers. Are they or are they not going to take credible steps towards resolving the debt crisis, or are they going to try and dress up a weak accord with lots of high-fiving and chest-bumping.? If they do not the consequences are dire. Their collective paper will become increasingly worthless with successive downgrades. Currencies will deteriorate and gold will reach new highs. As the deadline approaches, there will be moments of optimism that a resolution is at hand, but current reportage suggests that form will triumph over substance. Yesterday's inventory reports showed that crude oil drew more than expected, which helped the mid-day reversal off the day's lows, actually buyers returned to the market in dramatic fashion, rallying prices more than a dollar. While confined to a relatively narrow trading band, it looks more and more like a lot of kinetic energy has built up for an upside breakout.


TECH TALK
 
Even though crude was under pressure most of the day, it managed a solid reversal to post a higher high, higher low and a higher settlement. An upside breakout from  99.42 will target102.44 resistance again. But as long as this level is not breached, the decline from 114.83 is still in favor to continue. Below 94.74 the bias turns negative for a retest on 89.61 support. A break there would put 83.65/85 in the crosshairs.
 

NATURAL GAS

The worst of the heat will pass by weekend so the market is losing some of its upward momentum. Buoying prices though will be the high probability of a succession of lower weekly injections, the first of which is due later this morning. We think the report will show that only 57 bcf was added to the 2.672 Tcf already stored. It will probably take a reading closer to 50bcf though to gin up more upward momentum.. One of the elements that helped advance gas prices in the Spring has been obviated as nuclear generation climbed to a seven month high as of July 11th. Still, no matter what weather patterns arise in the Gulf, or how hard heat drains stocks, high production will continue to brake most rallies. Only a vibrant economy can turn offset that.


TECH TALK

Prices remain in the neutral zone with 4.383 support intact. Similarly, overhead resistance at 4.632 is untouched, as well. A break below support will mean that the recent rally off the 4.064 lows is over and suggest that the larger move from the early June highs has resumed. Prices remain well ahead of the 13-day EMA and ahead of today's pivot point of 4.51. today's low of 4.498 though shows that the market's strength is waning. A retreat below the 4.064 low will target 3.731.
 

source: KilduffReport.Com