Oil and gas storage reports

dan_s · Post by **dan_s** » Fri Jun 04, 2010 1:27 pm

Dated 6-3-2010

Crude
U.S. crude oil settled higher today after a volatile session on Thursday. The Government oil inventory report showed crude oil and gasoline stocks fell more than anticipated. This caused a buying frenzy due to the implied oil demand, which is at its highest level since early last year. The EIA weekly oil inventory report said crude stockpiles fell by 1.9 million barrels last week. Gasoline inventories fell 2.6 million barrels, when expectations were for a 500,000-barrel fall. Distillates rose slightly more than expected and refinery capacity use fell. Total demand is approximately 8.1 percent higher than a year ago period. The U.S. dollar also rose as investors debated the outlook for the U.S. Labor market a day ahead of the government's key non-farm payrolls report. Prompt month WTI rose $1.75 to settle at $74.61 a barrel. Brent crude rose $1.66 to settle at $75.41 a barrel. Nymex July RBOB rose 5.51 cents to settle at $2.0812 a gallon and Nymex July heating oil rose 3.32 cents to settle at $2.0391 a gallon.
Natural Gas
Thursday's roller coaster ride was all about technical trading. Even with a smaller than expected storage number, July Nymex natural gas contract surged and reached a major Fibonacci target of $4.69. It broke through the key resistance number of $4.52 that was the 200-day moving average. The next resistance levels are $4.802 and then $4.915. The support levels are $4.25 and then $4. One would not want to discount fundamentals too much with industrial demand improving, warmer weather and the start of hurricane season. EIA report an 88 Bcf increase, which shows total domestic gas inventories to 2.357 Tcf. Although it narrowed the surplus to year ago to less than 2 percent, it is above the five-year average at 306 Bcf, still a comfortable cushion to rebuild stocks for next winter. NWS 6 to 10-day forecast calls for above-normal temperatures across more than the southern third of the nation and below-normal readings in the Northeast and Northwest.