Energy Futures Update

Today's main event remains pointed towards the OPEC meeting and what rhetoric that might arise of it.

Yesterday's weekly inventory data painted a mixed picture of the current supply situation, which led to some short term volatility in the markets, before WTI turned slightly bullish with some short covering after the recent weeks losses.

We expected OPEC to keep production on hold, with the faster than normal drops in OECD inventories and the tightening of inventory balance projections both argue for NO CHANGE in output. If this is the case, then there really is very little downside in the WTI crude market and we expect this to hold true above the $57.75 level.

The significance of $57.75 is becoming more evident for each time we test it. Yesterday's test was no different than the many times we came upon major support throughout February. Any move into the 57.75 to 57.45 area will leave the market in nervous territory.

We would resist the temptation to be involved at that level and only sell into a break below 57.45.

Other than that, we favor a slightly optimistic view to WTI Crude prices, even ahead of the OPEC meeting.