Crude outlook today Houston, TX -- The July NYMEX crude, RBOB gasoline and heating oil contracts will open lower this morning after last week's breathtaking rallies on Thursday and Friday.

In fact today's drop in prices is really a retreat from Thursday and Friday's unbelievable move to the upside that has been attributed to a number of factors that have been used for quite some time. They include a weak dollar, geo-political concerns in Iran and Nigeria and soaring demand in growth areas China, India and the Middle East (all of which subsidize energy prices to their citizens). On Thursday and Friday July crude soared by $16.24, while July gasoline and heating oil contracts zoomed higher by 35.29 and 42.89 cents per gallon respectively, of course without one barrel of oil lost due to any of the above factors.

The main reason, in our opinion, for the sudden change in price direction was speculators swayed by Wall Street analysts from Morgan Stanley and Goldman Sachs and others claiming that $150.00 oil was possible by July 4, and an ill-timed statement from an Israeli official about the inevitability of an attack on Iranian nuclear facilities.

Our early view for today's trading session, since there is no fresh market moving news (or hype) at the moment is for a solid pullback attributed to some profit-taking and possibly some liquidation. Our problem is trying to define how far the pullback will go before the bulls decide to support prices in their quest for prices above $150 per barrel, or even $200 per barrel. We believe there is the potential for prices to easily fall by $3.00 to $5.00 before any support becomes evident.

However, there is no question the bulls could jump in much sooner and push for new record highs before today's session ends. It is a very jittery marketplace and the big investment banks know they can send a signal to the market at any time and everyone will jump on the train.