Analysis and Recommendations:

Crude Oil inventories came in under expectations, surprising the market and driving prices upwards. Crude is currently trading up +1.07 at 107.14

Crude-oil continued to gain after a weekly government report showed a decline in inventories. The Energy Information Administration said crude inventories declined 1.2 million barrels in the week ended March 16. Analysts polled by Platts forecast an increase of 2.1 million barrels for the week. The EIA also reported gasoline stockpiles were down 1.2 million barrels, and distillates supplies increased 1.8 million barrels. The analysts surveyed by Platts had expected gasoline and distillates supplies to decrease 1.8 million and 1.6 million barrels, respectively.

Last week an erroneous report about the Obama Administration considering the release of crude oil drove market prices down as low as 103.00 before the rumors were stopped and the story retracted.

Marketwatch.com reported today:  

Saudi Arabia's comments show how the country is trying to ease the geopolitical premium in the market with the tensions with Iran, said Tariq Zahir, a managing member with Tyche Capital in the New York area.

Another aspect that can put pressure on the energy market is a release of crude from the Strategic Petroleum Reserve, which has been talked about since last week.

President Barack Obama is scheduled to visit an oil hub near Cushing, Okla., the delivery point of Nymex oil, and markets would not be surprised to see the administration announce a release of crude oil from the SPR, Zahir said.

There is no supply and demand reason that oil should be at this level, regardless of the oil embargo and rhetoric from Iran.  With Global reductions in growth estimates and an overall slowdown in China, overall oil demand continues to decline. Now that the US is a net exporter of petroleum products, there is not financial reason for this price.

Oil over 100.00 per barrel is a threat to the economic recovery of the US and should be viewed as such and the US has built the Strategic Reserves for this purpose.

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Economic Events: (GMT)

WEEKLY

Crude Oil Pivot Points (Time Frame: 1 Day)

 

Name S3 S2 S1 Pivot R1 R2 R3

Classic
104.603
105.332
106.203
106.932
107.803
108.532
109.403

Fibonacci
105.332
105.943
106.321
106.932
107.543
107.921
108.532

Camarilla
106.635
106.782
106.928
106.932
107.222
107.368
107.515

Woodie's
-
105.368
106.275
106.968
107.875
108.568
-

DeMark's
-
-
108.168
107.114
106.568
-
-