Energy Futures Update

Yesterday's rally in WTI Crude was a true sign of strength.

Much as the market was eyeing a bearish engulfing pattern on the daily Crude chart, the bears were party to a rude awakening.

The lows were rejected and the resistance broken with relative ease, as Crude moved in excess of 5% to the upside on the day.

Inventories are expected to be in line with expectations, although keep an eye on distillates, as a draw of 2100K is expected.

However, it is hard to anticipate whether the recent cold weather front in the US will have an adverse affect on inventory data.

Crude & Gasoline are expected to show moderate builds according to the market Consensus vote.

Even ahead of weekly inventory data we favor the upside. Buy WTI Crude at 55.75. Targeting 58.50. Stops below 55.00. Good until the end of the week.