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    Crude oil prices rose to their highest level in four weeks due to bullish supply and demand factors from recent reports, stronger stock markets, and a stronger euro. The IEA increased its global oil demand growth forecast for 2010 and noted rising OECD inventories. While fundamentals influenced prices, large moves have also accompanied changes in the euro or equities, and investment buying still plays a role. The euro's influence may be temporary as its role depends on the positions of the US and China. Technically, crude oil needs to close above $75.75 to sustain its advance.

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    Crude oil prices rose to their highest level in four weeks due to bullish supply and demand factors from recent reports, stronger stock markets, and a stronger euro. The IEA increased its global oil demand growth forecast for 2010 and noted rising OECD inventories. While fundamentals influenced prices, large moves have also accompanied changes in the euro or equities, and investment buying still plays a role. The euro's influence may be temporary as its role depends on the positions of the US and China. Technically, crude oil needs to close above $75.75 to sustain its advance.

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    36 views2 pages

    0610PM

    Uploaded by

    Zerohedge
    Crude oil prices rose to their highest level in four weeks due to bullish supply and demand factors from recent reports, stronger stock markets, and a stronger euro. The IEA increased its global oil demand growth forecast for 2010 and noted rising OECD inventories. While fundamentals influenced prices, large moves have also accompanied changes in the euro or equities, and investment buying still plays a role. The euro's influence may be temporary as its role depends on the positions of the US and China. Technically, crude oil needs to close above $75.75 to sustain its advance.

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    CAMERON HANOVER

     [DAILY PETROSPECTIVE] June 10, 2010 
     

    Early Evening Market Review for Thursday 
        The oil complex was strong yesterday, and crude oil prices broke to 
    their highest level in four weeks as traders bought on a combination 
    of  bullish  fundamental  factors  (in  this  week’s  DOE  report  and  in  an 
    IEA  report  out  Thursday),  technical  strength  (on  the  charts),  higher 
    equities  quotes  and  a  stronger  euro.    The  euro  advanced  to  more 
    than  $1.21  after  flirting  with  $1.19  earlier  this  week.    And,  the  DJIA 
    roared  higher,  gaining  273.28  points,  to  finish  at  10172.53.    These 
    were  the  heavy‐hitting  factors  that  led  crude  oil  prices  to  their 
    consecutive daily price increase, which had not been seen since April.  
    Crude oil finished at its best price since May 12th.   
    Page | 1                                                                                                                                             Research: 203.801.0771 
                                                                                                                                                                      Sales:  203.504.2786  
     
    www.cameronhanover.com                                                                                                    Powered by FMX | Connect                        
    CAMERON HANOVER
     [DAILY PETROSPECTIVE] June 10, 2010 
     
         The  IEA  (International  Energy  Agency,  which  watches  oil  supply  &  demand  for  the  OECD  countries) 
    increased its estimate for global oil demand in 2010 by 60,000 bpd.  It now expects to see an increase of 2%, or 
    1.7 million bpd in world oil demand this year.  At the same time, though, it noted that OECD inventories hasve 
    been  rising,  and  it  said  that  these  now  stand  at  levels  high  enough  to  cover  60.5  days  of  forward  demand, 
    which is up by more than a full day’s worth of forward 
      supply (from where it stood a month ago).   
    EIA Natural Gas Storage Report 
    Cons Region East   1148 bcf   up 53 
         The IEA also noted  that Chinese oil  demand, which 
    Cons Region West    412    up 18  it expects to account for 40% of the world’s growth in 
    Producing Region    896    up 28  demand  in  2010,  could  be  adversely  affected  by  any 
    Total Lower 48    2456 bcf    up 99 loss  of  euro‐zone  demand  for  Chinese  exports.    Any 
    loss  in  consumption  of  Chinese  goods  could  lead  to 
    lower  demand  for  energy  to  produce  those  items.  
    Dow Jones noted that the most recent data on Chinese crude oil imports showed them down 16% from their 
    peak in April, although that still left them 4.4% higher than they had been a year ago.   
         While the fundamentals are clearly playing a more definable role in oil complex price activity recently, the 
    bigger moves we have seen in 2010 tend to have been accompanied by large moves in the euro (versus the 
    dollar) or in equities.  There does not seem to be the same degree of blind, buying interest by investors, but  
    investment buying does still play a large role in oil price movement. 
          Since early May, moves in the euro have had huge impacts on equities prices and on commodities prices.  
    This  week,  it  has  remained  influential,  with  traders  following  its  moves  by  making  corresponding  moves  in 
    equities and commodities.   
          But, we do not believe that the euro really has the legs to continue influencing other markets as much as it 
    has been recently.  Its influence seems to be primarily a function of Europe acting as a kind of swing‐vote or 
    incremental  element  of  demand  in  world  markets  right  now.    But,  it  can  onlt  exert  this  balance‐tipping  role 
    while the US and China maintain their relative positions of influence in the bigger picture.  Changes in relative 
    influence can have wider‐ranging effects, here.   
           Technically, crude oil prices had a strong day.  But, they did not finish above $75.75, and they need to do 
    that to get a fresh advance off the ground.  It could happen on Friday, though. 
     
    Crude Oil Daily Technical Chart 

     
    Thursday’s advance leaves crude in a good position to assault resistance at $75.75 on Friday. 

    Page | 2                                                                                                                                             Research: 203.801.0771 
                                                                                                                                                                      Sales:  203.504.2786  
     
    www.cameronhanover.com                                                                                                    Powered by FMX | Connect                        

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