Commodities Technical And Fundamental Analysis For July 14, 2011

Oil Technical Analysis for July 14, 2011

Light Sweet Crude

The CL contract shot upwards on Wednesday as traders bought into the commodity trade in general. The market is currently trying to break through and above the $100 level, and one would be lead to believe that the level should attract sellers. However, on each pullback, this market has proven that those are to be thought of as buying opportunities. We think buying on the dips is still the way to go.


Brent tested the $120 level on Wednesday as traders continue to upward pressure at the level. The market looks very resilient, and one would have to conclude by looking at the charts that the real danger lies in the upside, not the down. A fall from this point would more than likely signal a buying opportunity.

Oil Fundamental Analysis for July 14, 2011

Crude oil prices rose on Wednesday, as the U.S. dollar weakened after the Fed’s Chairman Bernanke signaled the Feds are ready to undertake a third round of quantitative easing (QE3), which bolstered confidence among traders, as they targeted higher yielding assets including crude oil. Moreover, the EIA report showed that crude oil inventories fell last week more than expected.

The EIA report showed that crude oil inventories for the week ending July 8, decreased by 3.1 million barrels, compared with the prior drop of 0.9 million barrels, and also below median estimates of a drop by 1.5 million barrels, which also provided crude oil prices with more momentum to gain.

Mounting speculations of QE3 could still weigh down on the USD , and accordingly, that could provide crude oil prices with more bullish momentum, nonetheless, the uncertainty surrounding the outlook for global growth and the ongoing concerns from the European debt crisis could still weigh down on crude oil prices.

Thursday July 14:

It will be a busy day for the U.S. economy with heavy data due for release at 12:30 GMT. The start will be with the Producer Price Index for June which is expected with 0.2% drop reversing the same earlier gain and rise 7.4% on the year; Core PPI is expected steady in June at 0.2% while to rise slightly on the year to 2.2% from 2.1%.

At the same time, the June retail sales are expected also with weakness, where sales less autos are expected with 0.1% rise following 0.3% and excluding auto and gas with 0.4% gain following 0.3%.

The weekly jobless claims are also to be released at the same time after the improvement in the claims reported the previous week when they eased to 418 thousand.

Business inventories report is due at 14:00 GMT for May and expected at 0.6% following 0.8%; it is a very minor report and does not affect the market.

At 14:00 GMT, the Fed’s Chairman Ben Bernanke will provide his semi-annual testimony before the Senates, although Bernanke is expected to give the same testimony he gave to the House of Representatives on Wednesday.

Natural Gas Technical Analysis for July 14, 2011

The natural gas markets rose again on Wednesday as traders continue to prove the merit of a $4-$4.20 support area. The pair is approaching the $4.40 mark, and a pullback could be expected. However, this is a minor area, and a fall in price could be the entry point those of you not involved in the market are looking for as buying is recommended at these lower levels.

Natural Gas Fundamental Analysis for July 14, 2011

Natural gas prices extended their gains on Wednesday, as warm weather conditions in Midwest and East of the United States led traders to speculate that demand for power-plant fuel will rise to meet rising cooling demand, which pushed natural gas prices higher .

Expectations of warm weather conditions could push natural gas prices further to the upside, since it will increase speculations of rising demand for power-plant fuel to meet rising cooling demand, while the EIA report for natural gas inventories will be released on Thursday, and it is certain to be the major mover for natural gas prices.

Thursday July 14:

At 14:30 GMT, The EIA will release the weekly natural gas storage change for the week ending July 08, where the prior report showed that natural gas inventories increased by 95 billion cubic feet, and expectations show that natural gas stockpiles increased by 79 BCF last week.

Gold Technical Analysis for July 14, 2011

Gold broke to all-time highs on Wednesday as the Federal Reserve Chairman spoke in front of Congress and suggested that more easing could be coming . Because of this, one has to think that the appeal of gold will only increase as traders more from fiat currencies. The recent consolidation between $1,475 and $1,550 suggests a move up to $1,650 or so.

Gold Fundamental Analysis for July 14, 2011

Gold continued the upside rally on Wednesday to a record high as the debt woes prevailed and the dollar slumped which further supported gold.

The market recovered on Wednesday in a relief rally on China and on the dollar weakness after the FOMC minutes said that some members discussed expanding the stimulus as the recovery weakens and Bernanke on Wednesday assured that by saying they stand ready to add stimulus as the rise in inflation is temporal and more weakness will increase deflation threat, assuring that the low rates will remain for an extend period of time.

The feds weakened the dollar and led a broad rally in a clearly uncertain outlook or sentiment which supported haven demand on gold further. The debt crisis did not ease and did now unwind the pressure and we expect it to continue to haunt the market and support gold further on Thursday.

The relief rally will lose the upside momentum and the market will return to the debt crisis and especially after Moody’s downgraded Ireland to junk following their move on Portugal while Germany dismissed Reuter reports that the is an emergency summit on the debt crisis on Friday, assuring that the response from the euro area remains slow.

Gold might be affected on Thursday with more volatility after reaching new records and as the market loses the upside relief momentum and the dollar readjusts after the strong slump yet the overall support for gold from haven demand will prevail. Inflation data from the euro area and the United States will also add to the volatility and support the metal remain generally bullish for now as the debt crisis is still unresolved and remains the strongest upside support.

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