The Energy Report for Thursday, March 27, 2008
The funds are back and you are gonna to be in trouble - hey la de la the funds are back. That's the way it felt for oil bears yesterday.
Oil soared in its biggest one day rally in years as the refiners responded to customer demand or lack there of. Refinery runs plummeted falling 1.6% and gasoline supplies fell as refiners saw no reason to continue to churn a more of product that less people wanted.
Yet we all know that the surge in oil was not just about inventory but really about the funds move back into commodities. Dismal economic numbers are erasing the optimism that crept into the market and caused the commodity bubble to burst.
Now the funds are back creating what will most likely be a double bubble and will rise hard as long as the economic news is bad and the weight of heavy inventories eventually overwhelms us.
Today€™s GDP may be the catalyst that pops us or continues to drive us higher.
It seemed that oil might retreat from yesterday's spike but then reports of an Iraqi pipeline explosion helped support prices. Sky News reported that Saboteurs have blown up one of Iraq€™s two main oil export pipelines and dozens of people have been killed in fresh clashes between government forces and Shia militias. The pipeline cut off 80% of the government€™s revenue, pushing the price of US crude oil up more than $1 to 10700 a barrel. At least 44 people have been killed during the fighting.
Don€™t for get to checkout the Fox Business Network and call to get on the Phil Flynn energy blast! Call me today at 800-935-6487 or email me at email@example.com to open your account.
Stopped on short May crude from apprx 10420 at apprx 10700.
Sell May RBOB at 26900 - stop 27200.
We're short May heating oil from apprx 28700 - stop 30000.
Buy May natural gas at 910 - stop 890.
Have a GREAT day!