Natural Gas Price May Touch $ 5 per BTU, Making More Pipelines Viable
| Crude-oil and natural-gas prices rose as optimism about a turnaround in the battered global economy offset pressure from robust supplies of both commodities. Natural gas for June delivery on the New York Mercantile Exchange rose 19.4 cents, or 5%, to settle at $4.081 a million British thermal units, the highest settlement since March 24. Natural gas is up 13% this month. Light, sweet crude for June delivery rose 37 cents, or 0.7%, to $56.71 a barrel, the highest settlement since Nov. 14. Crude is up 27% in 2009. Energy commodity prices advanced amid reports that U.S. claims for state unemployment benefits dropped last week and that retailers had stronger-than-expected sales in April, helping to bolster increasing hopes of a turnaround in demand for oil and natural gas. In the gas market, "we are riding the prior wave of exuberance from economic indicators pointing toward a potential bottom," said Pax Saunders, an analyst with Gelber & Associates, of Houston. Natural-gas prices closed sharply higher even after the Department of Energy reported that the amount of gas in U.S. inventories rose by 95 billion cubic feet last week to 1.918 trillion cubic feet, leaving stocks 23% higher than the five-year average and 34% above the same week last year. In addition to the increasing optimism about a return of industrial demand, gas-market watchers pointed to a brisk pullback U.S. drilling activity as an indicator that supply would decline. The number of rigs drilling for gas in the U.S. has fallen by more than half since September. While crude settled at its highest in nearly six months, the front-month contract gave up the bulk of the day's gains as equities fell. The oil market has hitched itself to equities for much of 2009, viewing stocks as an indicator of the future strength of the U.S. economy, which will in turn determine the demand for oil. The oil market avoided an outright loss only because of strong buying in gasoline futures. The fuel's peak demand season is rapidly approaching, as U.S. driving typically picks up at the end of May. Refiners may be tempted to run more crude in order to ramp up gasoline production, after running at low processing rates for months. |
Dow Jones and Crude Technical View
Crude Technical View :
A bullish flag pattern being seen on the daily charts. Sustained move above 53.5-54 would imply a quick move to 59-68.
Double bottom around 47 levels also shown on the chart. A close below those levels would negate the view and may lead to bearish implications.
Dow Jones Technical View :
In the last update i had reservations about the move being able to cross 7600 ( 61.8 % ) levels and going towards the upper end of the channel. Since the index crossed 7600 the next technical target comes to the channel top at 8300-8550 roughly. Till it holds 7700 levels we can expect a test of the upper channel in short term.
Once the index reaches those levels one needs to be cautious over the world markets.
Gold weakness continues to remain with it hovering around the 880 mark. Lets c if it can convincingly break 865-885 zone and the next target would be 845/810. Upsides would face resistance at 905/920.
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