This week the EIA will release its weekly oil inventory snapshot one day late on Friday, Jan 4th at 11 AM EST due to the New Years Day holiday on Tuesday. The API inventory report will also be released one day late on Thursday afternoon, Jan 3rd. Finally the EIA Nat Gas inventory report will be released also one day late on Friday, Jan 4th at 10:30 AM EST.
I am maintaining my view at neutral and my bias at cautiously bullish as the current fundamentals are still biased to the bearish but the forward view of 2013 fundamentals are starting to look more supportive. In addition the technicals are indicating that the selling momentum has eased as the market is has now moved into a higher level trading range over the last two days.
There is still no shortage of oil anyplace in the world and a portion of the risk premium from the evolving geopolitics of the Middle East is continuing to slowly recede from the price of oil. But as discussed above the market seems to be paying less attention to the nearby fundamentals. In the short term the price of oil is still very susceptible to sudden price moves based the 30 second news snippets. This is still an event driven market for oil at the moment.
I am maintaining my Nat Gas view at neutral and bias at cautiously bearish side as the fundamentals and technicals are still suggesting that the market may be heading lower for the short term. I anticipate that the market is now positioned to remain in the new lower trading range... as the latest temperature forecast is once again less supportive. As I have been discussing for weeks the direction of Nat Gas prices are primarily dependent on the actual and forecasted weather pattern now that we are in the heart of the winter heating season and currently those forecasts are back to switching to a more neutral to bearish scenario.
Markets are mostly higher heading into the US trading session as shown in the following table.
Dominick A. Chirichella