Energy Futures Update

The weekly inventory data on Crude and related products painted a bullish picture of the markets yesterday, however failing to move higher into new territory leaves the market in danger of stalling.

Crude and gasoline inventories were more or less in line with expectations, however distillates showed a larger than expected draw at 3.7 mill versus an expected 2.5 mill barrels. The rebound in US stocks markets kept a positive outlook for future US growth prospects, which also helped support the Crude markets.

The outlook for the rest of the week is slightly mixed. The move up yesterday was a sign of strength, whereas the inability to break through the highs is a sign of a stalling market.

The ascending wedge formation could very well come into play soon. But we still do not see any reason for a greater correction in Crude prices, thus any drop down to 60.75 and 59.84 represent good opportunities for fresh longs on a move towards the upper end of the daily range.

Keep stops below a break of 59.84.