Oil Technical Analysis for July 6, 2011
Light Sweet Crude
The CL contract rose massively during the Tuesday session, and has comfortably broken above the $95 level. The market has shown that it simply does not want to break below $90, and now it looks like $95 might be supportive as well. We are looking to buy dips at the moment.
The Brent market had a very similar day on Tuesday, breaking above the $112.50 mark. The market certainly looks buoyant, and we like buying dips at this point. The market cannot be shorted until we break below the $102.50 level.
Oil Fundamental Analysis for July 6, 2011
Crude oil prices rose strongly on Tuesday despite that the U.S. dollar gained ground against major currencies, but crude oil prices rose after Barclays Capital adjusted its 2012 forecasts for Brent and Crude oil prices to the upside, which provided crude oil prices to rise above $96 a barrel.
Investors will be eyeing developments around the globe, since rising risk aversion will most likely put negative pressure on crude oil prices , noting that the U.S. will release the ISM services index for June, and if it shows strong expansion in June, we should expect crude oil prices to extend the gains, although we still preserve our cautious outlook, since later in the week, the infamous jobs report will be released from the United States.
We should also note that the weekly EIA report for crude oil inventories was postponed till Thursday due to the Independence Day holiday on Monday.
Wednesday July 06:
The U.S. will release the ISM Services for June at 14:00 GMT, and expected to ease to 53.5 from 54.6 in May.
Natural Gas Technical Analysis for July 6, 2011
The natural gas markets had another very volatile day on Tuesday, but it clearly shows that the $4.20 mark is acting as massive support at this time. The market clearly looks as if it want to continue trading in this overall range, and since we are at the bottom of it – we like buying dips until we get below the $4 mark.
Natural Gas Fundamental Analysis for July 6, 2011
Natural gas dropped on Tuesday , where expectations of moderating weather conditions weighed down on natural gas prices, as demand for power-plant fuel will ease.
Weather forecasts suggest that temperatures will be moderating over the coming period after a period of higher than normal temperatures, and accordingly, traders are speculating that demand for power-plant fuel will decline, and that should keep natural gas prices under pressure .
Gold Technical Analysis for July 6, 2011
The gold markets absolutely exploded to the upside as traders bought the metals en mass. The market looks very healthy, and we have proven that the $1,475 area is going to be supportive for the time being. The uptrend over the last 10 years still has us buying on dips, and refusing to sell at these levels.
Gold Fundamental Analysis for July 6, 2011
After the bullish start for the week gold continued the upside rally on Tuesday offsetting the dollar gains amid a good-run for commodities across the board.
Gold rallied on Tuesday with the prevailing jitters in the market over the outlook for Greece and sparked by S&P’s warning early this week that it will account the voluntary participation of the private sector under the French proposal as “effective default”.
Haven demand is finding its way back to the metal as the optimism over the austerity package and the release of the July tranche ease as the outlook remains challenging for Greece.
Other support was seen from inflation hedge after the RBA left rates steady and China was warned of an evolving risk in the banking sector with high bad-debt and fears they will eventually need to bailout their banks.
Inflation was also predominant with the broad gains for commodities led by crude oil on unwinding of deep slowdown fears from the United States and crude recovered from the losses on the back of the IEA decision to release supplies, as investors now downplay its effect on prices.
On Wednesday the volatility will still be seen with the focus shifting to the rate decisions on Thursday from the BoE and ECB alongside the jobs report from the United States on Friday with the ISM Services another hint and due at 14:00 GMT on Wednesday.
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