Why Crude Could Go Even Lower
In spite of the continued violence in the
Middle East
and the anticipated driving increase this summer for vacations, August crude-oil futures
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on light volume today.
The reason for the drop was on a report that Venezuela plans to exceed its oil
production quota by 400,000 barrels a day for the rest of 2002.Venezuela is
already producing about 200,000 barrels a day more than the 2.49 million barrels
a day it had agreed to with the Organization of Petroleum Exporting Countries.
Over the past month, there have been signs that the government, which is in
desperate need of cash to narrow a budget deficit, would push crude output even
higher, this according to the Wall Street Journal.
The
September Nasdaq 100
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lows. Today the NDU2 fell below support at 1050 and closed at 1043, down 26.50.
The action on the day looked very much like a Triple Witch, with decent volume
in the morning and then increasing volume by the afternoon.
The September S&P 500 futures
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continued the descent below 1000, closing at 992.50. This is increasingly close to
the September 2001 lows.
Click here to keep an eye on the TradingMarkets.com Market Bias
Indicators for possible CVR signals.
The September dollar
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continued sharply lower this morning as the record April trade deficit added
another to the declines. According to the Wall Street Journal, record
trade outflows force record investment inflows which global investors just
aren’t interested in given the continued weakness in the equity markets and the
opportunities abroad. The dollar is trading at Y121.9 and at a two-year low
against the euro at $0.9639.
The weekly chart for the September dollar
shows that prices are in a steep downtrend. Solid support is at the 108.00 area.
Historically, downtrends tend to last longer in major currencies. This means
that there is a possibility that we could see further decline in the dollar in
the coming weeks.
In afternoon trading, crude oil for August
delivery lost .15 to close at 25.82. August heating oil
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declined .86 cents, or 1.29%, to 65.56 cents a gallon. August gasoline
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only positive gainer moving up .02, or .73%, to 3.29.
Weather forecasts for warm weekend weather across
much of the Midwest was good news for crops. This caused wheat prices to drop,
but soybean and corn futures closed positive. Wheat for July delivery
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cents or 1.64% to $4.95 1/2 a bushel.
In the metals on the Comex division of the New
York Mercantile Exchange, August gold futures
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above the $325 an ounce level to $325.30, up 1.60. It stayed within
yesterday’s trading range between $321.70 – $325.40 range. Usually when gold has a
rally, silver will follow the trend. Today was not the case, however. July
silver
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and fell to $4.86 an ounce, a 1 cent loss. July copper
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closed down .85, or 1.13%, to 74.29 a pound.