NYMEX Oil Complex Ends Lower as Speculators Rest
Oilintel Houston, TX - The NYMEX oil complex lost some of its gains from last week as speculators, rather than pushing prices higher, seemed to take the day off while taking profits early. Crude oil jumped more than $16.00 with gasoline and heating oil up more than 35 and 42 cents per gallon respectively in the final two trading days of last week. The rally was attributed to Morgan Stanley's prediction of $150 per barrel crude oil by July 4, along with a statement by an Israeli official about the eventual destruction of Iran's nuclear program.
In addition, the trigger seemed to be when the European Central Bank suggested an interest rate increase was possible at its next meeting as a way to stem rising inflation. Today's pullback was expected after last week's late surge and may have been aided by news that Saudi Arabia is calling for a meeting between oil producers and consumers in hopes of addressing energy prices that they say are uncalled for with current supply and demand in balance. In fact Saudi Arabia knows full well they are not in balance at all. Supply far exceeds demand right now and this price is unjustifiable.
Our view for overnight trading suggests prices are likely to test today's low of $133.00 with a failure to do so bringing another move higher. However, a breach of today's low could, if some of the weaker speculators decide to liquidate additional positions, send crude oil to the $130.00 to $131.00 area before finding any real support.
