The NQ's made new yearly highs and the ES's came withing a few points of the highs also, why would you be so surprised that crude could do the same?
"Fear is dominating the cyclical commodity markets today, as investors are concerned that the spreading of swine flu in Mexico may severely damp hopes of an economic recovery," said analysts led by Eugen Weinberg at Commerzbank in a note to clients. However, "we consider these concerns premature and expect the oil price to move sideways, with some volatility between $45 and $55," they said. "Given that oil market fundamentals are still weak, downside risks prevail at the moment." On Wall Street, stocks were trading mixed. The Dow Jones Industrial Average was up 0.2% to 8,093.81. It earlier fell to 7,987 amid concerns over the outbreak of swine flu, which originated in Mexico. The disease has killed 103 people in Mexico and virtually shut down Mexico City on Sunday, while the U.S. declared a public health emergency. See full story. "Nervousness about another batch of U.S. earnings reports and macro reports, coupled with a potential pandemic out of Mexico, are weighing on [oil] prices," said Edward Meir, an analyst at MF Global, in a note to clients. "The Mexican situation is resurrecting fears of the chilling impact that the SARS epidemic had on economic growth," Meir said.
Stock analysts: swine flu unlikely to be major market mover --------------------- ) - The spread of swine flu had some analysts Monday drawing comparisons to the 2003 outbreak of Severe Acute Respiratory Syndrome, or SARS, but they downplayed the idea of major market disruption from the latest outbreak. "Swine flu has the potential to become a significant global market mover if it were to develop into a global pandemic. However, it is still too early for this," said Lars Christensen, chief analyst, Danske Bank. On Wall Street, healthcare shares led stocks higher on Monday, helping indexes mostly bounce back from opening declines. The Dow Jones Industrial Average gained 1.69 points to 1,695.66. The deadly outbreak that has killed more than 100 people in Mexico has spread to the United States, where 20 Americans have caught the disease, and to Canada, where six people are infected. Read detailed report. "Over the coming weeks swine flu is likely to either fade away as a market theme or escalate into an all-consuming market driver depending on whether or not it develops into a pandemic in the U.S. and/or other industrialized countries," said Christensen, who noted significant drops among airline stocks on fears the flu might reduce international travel and trade activity. Disrupting travel, trade and the workplace, the SARS outbreak in 2003 lasted six months and killed 775 of the 8,000 people infected in 25 countries. It had a significant, albeit short-lived negative impact on Asian financial markets, though the global economic impact of SARS proved quite limited, the analyst noted. "At this stage, it is near impossible to assess the global macro-economic impact of swine flu, but our main scenario is that the impact will be relatively limited, as was the case with SARS in 2003," said Christensen. "We are sympathetic to the idea recalling the impact of bird flu on Asian GDPs during that scare and so understand the market's temperament with the initial headlines about various cases being found in the U.S.," said David Ader, U.S. government bond strategist at the Royal Bank of Scotland. The Asian Development Bank said SARS cost East and Southeast Asia $18 billion or 0.6% of GDP - 2.6% for Hong Kong, and 2% for Singapore for the first part of 2003, said Ader. "The concern is that the flu becomes a very serious and disruptive pandemic. The last major flu pandemic scare was SARS. We expect some food export restrictions until this flu attack clears," Frederic Dickson, chief market strategist at D.A. Davidson & Co. End of Story
i'm stubborn and i don't like to be wrong. it's horrible for trading i know, i'm trying to stop having opinions about what the market SHOULD do. i'm cashing out at 49.50 here. shouldn't have let it go so far against me though.
- market place adding to safe harbor buying in precious metals and oil ahead of Fed report (wednesday?) on stress Test 1)The contango play is still running strong and encoring the marketplace to put oil away for a rainy day. Not only are they storing oil on land but on sea as well. Yesterday Bloomberg News reported that Frontline Ltd., the worldâs largest supertanker operator, said traders are storing 100 million barrels of oil at sea, enough to supply Europe for five days. The amount is about 25 percent more than Frontline estimated in January and will help buoy tanker rates that have slumped 87 percent since peaking in July. Oil is mostly being stored on modern double-hulled carriers. In fact 10% of all of the 405 such carriers in service is used just for storage at this point. 2) Yet despite this sea of crude oil, the market continues to stay strong. Oil is being bought by some funds as a safe haven play ahead of the release from the Fed a report on how the bank stress tests are going to be carried out. This stress test is adding stress to the market place adding to safe harbor buying in precious metals and oil. Oh sure, gold got help by some stronger than expected demand in India ahead of a major gold buying holiday and on word that China increased their gold reserves. Yet the market did seem to be a bit on edge as well. Oil looked again to stocks but also to metals as an excuse to ignore heavy supply fundamentals and what some say are some bearish chart formation set ups.
Goldman recommends selling U.S. crude for July delivery. --------- Goldman Sachs analysts said in a note Monday they see U.S. benchmark oil prices pulling back to the "mid-$40 a barrel range" in the near future to shore up demand and bolster the market. "The recent weakness in fundamentals has been substantial, with U.S. total petroleum inventories building counter-seasonally in the last several weeks to record-high levels for this time of year and implied U.S. total oil demand collapsing below last autumn's lows," Goldman said. The bank recommends selling U.S. crude for July delivery.
1) Oil prices slumped as reported human cases of potentially lethal swine flu spread from Mexico, where the death toll has reached 149, to the U.S. and other countries. The widening exposure suggested travelers will stay home, and airline and hotel stocks came under heavy selling pressure. Oil traders braced for a further slide in jet fuel consumption. The European Union's health commissioner, Androulla Vassilou, recommended avoiding "nonessential travel to the areas that are reported to be in the center of the cluster," which would include much of North America. 2) Cutbacks in international travel would further chisel away at world oil demand that the International Energy Agency already expects will fall by 2.4 million barrels a day in 2009, to 83.4 million barrels a day. Jet fuel and kerosene consumed by member nations of the Organization for Economic Cooperation and Development totaled 3.9 million barrels a day in February, down steeply amid the global recession. 3) The oil-market impact of the viral outbreak is "probably not that significant," said Kyle Cooper, director of research at IAF Advisors in Houston. "But in a market that's already bad, it layers it on." 4) The flu outbreak recalled the Severe Acute Respiratory Syndrome, or SARS, epidemic. That health threat severely restrained air travel in Asia, reducing global oil demand by about 1% between April and June of 2003, analysts at JPMorgan said in a note. 5) Incipient rallies have flagged as oil stockpiles sit at their fullest in more than a decade. In the U.S., analysts expect data due Wednesday will show crude stockpiles grew for an eighth-straight week in the week ended April 24. U.S. inventories are at their highest since September 1990. 6) Goldman Sachs analysts said in a note Monday they see U.S. benchmark oil prices pulling back to the "mid-$40 a barrel range" in the near future to shore up demand and bolster the market. "The recent weakness in fundamentals has been substantial, with U.S. total petroleum inventories building counter-seasonally in the last several weeks to record-high levels for this time of year and implied U.S. total oil demand collapsing below last autumn's lows," Goldman said. The bank recommends selling U.S. crude for July delivery.
do not take this as Sell advice for day trading , typically when these firms give recommendation that is for position traders who hold it for few weeks.
World markets in grip of swine flu fears ---------------------------------------------------- http://finance.yahoo.com/news/World...49.html?sec=topStories&pos=main&asset=&ccode= Fears that the spread of swine flu could further undermine demand for crude by cutting air travel pushed prices below $49 a barrel Tuesday. Expectations of a further build in U.S. oil stocks also depressed prices. Benchmark crude for June delivery was down $1.43 to $48.71 a barrel by noon in Europe, in electronic trading on the New York Mercantile Exchange. The contract Monday fell $1.41 to settle at $50.14. Swine flu has killed up to 149 people in Mexico and cases have been reported in the U.S. and Canada. Authorities around the world have stepped up precautions, with many international airports checking passengers coming from Mexico and the U.S. for signs of flu. "If it restricts travel and keeps people at home, it would have implications for all asset classes," said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore. "It has potential to be huge, but it could also be quickly contained." Vienna's JBC Energy also warned that any global outbreak could further depress the crude market, noting that prices were currently driven in part by "the fear-factor ... and not physical oil fundamentals." "The swine flu could potentially decimate demand for passenger air travel, something which happened in 2003 with the outbreak of SARS bird flu in Asia," said a JBC newsletter. Oil has traded close to $50 a barrel for the past month as investors struggle to forecast when the global economy may recover from its worst slowdown in decades. Traders will be watching the weekly petroleum inventory data from the Energy Information Agency on Wednesday. Analysts expect a build of 1.8 million barrels in crude stocks, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. Crude stocks already are near 19-year highs. "Crude has been really range-bound for a while," Moltke-Leth said. "Inventories are extremely high, and we're probably not going to see smaller supplies any time soon." Some analysts expect prices to fall over the next 12 months as an economic recovery fueled by massive government stimulus packages could fail to gain traction. Prices have risen from below $35 in February on optimism the worst of the downturn may be over. "The commodity revival over the last three months is fundamentally a dead cat bounce," said Charles Dumas, director at consultancy Lombard Street Research in London. "You still have tons of supply and oversupply in relation to demand." "I think the lows we saw in the $30s will be tested again." In other Nymex trading, gasoline for May delivery fell by more than 3 cents to $1.37 a gallon and heating oil lost more than a penny to fetch $1.30 a gallon. Natural gas for May delivery slipped by close to 2 cents, selling for $3.24 per 1,000 cubic feet. In London, Brent prices fell $1.18 to $49.14 a barrel on the ICE Futures exchange.