|
PureBytes Links
Trading Reference Links
|
Fellow traders,
I would like others views on short-selling crude oil futures.
The fundamentals look bearish, it's just a matter of time before the OPEC
and non-OPEC nations reveal that they have not been abiding by the
production quotas, and the technicals are VERY stretched. All in all, a
good risk/reward for a short sale at this price.
Any opposing or supporting views ?
Regards,
James
http://www.advsoftware.com (soon to be http://www.techtrading.com)
-----
The energies all fell today after it was disclosed that oil reserves and
gasoline inventories were higher than recent estimates. June crude (CLM9)
fell .48 to 17.57 and natural gas (NGM9) dropped 0.41 to 2.191. Unleaded
gas (HUM9) and heating oil (HOM9) hit 20-day lows, closing at .5162 and
.4243, respectively.
------------------
NYMEX Oil Review Part 2
However, the contract held critical support at $17.30
and partly rebounded amid short covering near trade's close,
brokers and traders said.
"There was some short covering today," a broker said.
"We couldn't really break through to the downside."
Trading in crude was very heavy, with estimated volumes
at a record high of 243,778 contracts traded, surpassing the
239,517 crude oil futures contracts traded on Mar 10. "There
was tremendous amount of spread activity," a broker
said.
However, fears of US refinery cutbacks triggered more
negative sentiments, which pressured the complex, brokers
and traders said.
Recent strength in crude prices was not matched by
similar gains in products, a disparity that led to poor
refining margins.
That decline has led many refiners to scale back crude
processing, traders said, meaning tighter inventories of
intermediate refinery products used to make gasoline.
Meanwhile, Venezuela's Deputy Energy and Mines Minister
Alvaro Silva Calderon said that the ministry is estimating a
$12 a barrel average price for Venezuela's basket of crude
exports in 1999. He said that every extra dollar the basket
price rises represents an increase of $1 billion more in oil
revenues for the year.
OUTLOOK:
In the absence of fresh news, brokers and traders are
mixed about Jun crude's direction Thursday.
"We're kind of stuck in a range," one broker said. "We
need to see a story that is going to take us out of this
$17.15-$17.80 range."
However, other brokers and traders said crude is
expected to trade in a lower range Thursday. "It's tough to
call because crude couldn't break to the downside today,"
another broker said. "But I think we could go as low as
$16.80 before we rally it back up."
A trader agreed that lingering negative sentiments
could continue to pressure the complex. "It's tough to get
through this number ($17.30), but the market is still
looking negative," he said. "Speculative longs are getting
washed out."
If the contract breaks through support at $17.30 and
later at $17.15, more sell-off could be triggered, pushing
crude prices below $17.00, a 4-week low.
---------------------
Technical Charts:
A weekly and a daily chart is attached.
Attachment Converted: "c:\eudora\attach\cln9_1.gif"
|