Energy Futures Update

We remain bullish on Crude as WTI trades against support in the 59.00 to 59.50 area. We expect this level to hold, even against any short term volatility or pressure from the weekly inventories.

The general market consensus indicates that market will be expecting a build in the Crude inventories of 1000k brls; a draw of -2000k brls in Gasoline and -1500k brls in the Distillates.
Although the current supply situation appears accommodative, they are far from capacious in lieu of rising demand. The reports being published today "will probably show gasoline supplies fell for a sixth time last week as refiners shut units in preparation for summer fuel making. US gasoline demand averaged 9.17 mill brls a day in the four weeks ended March 9, 2.8% higher than last year" the Energy Department said.

After what can only be described as a scary settlement in the April Crude contract yesterday (extending losses against the rest of the calendar months, which remained positive), we expect major support above the 59.00 level in the may contract to hold.

We remain long from 59.375 targeting 61.00 and 61.75 by the end of the week. Even if the weekly inventories show some downside, we expect support to show resiliance.