Crude Comment 06/05/09

Overview: In a relative quiet session that could have been interpreted as rather consolidation, crude held up well yesterday considering the soft equity markets and an overall strengthening in the US dollar against the Euro. Today' EIA report is expected to post another build in crude stocks but the total increase to more than 50 mb could have limited impact on the energy complex unless further assisted by a downswing in the stock markets.

9 day moving average - $51.91 14 day moving average - $50.76 40 day moving average - $50.21

Technical Report:

Probably the most important feature in yesterday's crude trading was the intraday high at $54.80 which also represents the high of 2009. However after crossing above the $54.75 level and thus taking the market price out of the sideways range crude failed to hold and as a consequence fell back within the range. So overall in a move that looked more like a consolidation crude lost 23 cents to settle at $54.14. With the moving averages edging higher it remains to be seen if crude will retest the new high or it's now on a downside path.

The short term trend is bullish, the medium term trend is sideways and the long term trend is bearish.

WTI:

Support: $5 3.49 (yesterday's low) Resistance: $5 6.10 (high of 2 8 /11/08)

Support:$52.56 (low of 04/05/09) Resistance: $55.30(high of 24/11/08)

Support:$5 1.91 ( 9 day moving average) Resistance: $54. 80 (yesterday's high)

OIL (BRENT):

Support: $5 3.64 (yesterday's low) Resistance: $5 6.15 (high of 1 7 /11/08)

Support:$5 2.36 ( low of 04/05/09 ) Resistance: $55.92 (high of 12/11/08)

Support:$51. 58 (9 day moving average) Resistance: $54. 91 (yesterday's high)

DOE Stock estimates (change in millions of barrels)

Crude +2.0 Distillates+1.0 Gasoline +0.5