A bullish DOE report helped energy futures move higher yesterday and ,coupled with refinery issues in the US and Mexico, helped values rise over 1.5%. With yesterday’s gains giving the bulls fresh momentum, it is not hard to see prices move higher once again, especially as Israel is looking more and more likely to make a pre-emptive strike against Iran before the November elections in the US. Turning to last night’s closing levels, Brent crude closed out the session at $116.25 up $2.22. WTI crude closed out the session at $94.33 up $0.90. Gasoil closed at $969.00 up $11.50 while UK Nat Gas closed at £55.47 down £1.17.

The Euro spiked lower to 1.2256 ahead of the European open but has since recovered to trade at 1.2280. Spanish Trade deficit is expected to have widened in July to €-2.7B from €-1.93B. Yesterday’s move lower was more dollar strength than Euro weakness and this is perhaps why its recovery has been so swift. Today resistance is seen at 1.2320 and again at 1.2380. On the downside we draw first support at 1.2235 and again at 1.2175.

Equities in the US closed slightly lower last nights with the DJIA closing at 13164.78 down 7.36 while the S&P closed at 1405.53. The VIX is trading at 14.63 while in Europe the FTSE is at 5830.40 down 2.64 and the DAX is at 6946.44 down 0.36.Gold is trading at 1605.20.

In economic data today we have already had UK Retail Sales data which came in at 3.3%, higher than expected while Euro-Zone CPI data came in bang on expectations at 1.7%. Later on we have Housing Starts and Initial Jobless claims in the US. Yesterday’s DOE inventory report showed us a 3699k draw in crude stocks, a 677k build in distillates and a 2371k draw in gasoline.

For Brent crude we draw first resistance at $117.00 followed by $118.00. On the downside we draw first support at $115.85 followed by $115.00.

For Gasoil we draw first resistance at $983.00 followed by $988.00. On the downside we draw first support at $974.00 followed by $970.00.

Jaime Miralles