cellulosic ethanol : a must watch video, page-3

re: significant short term rally imminent The Energy Report for Tuesday, May 23rd, 2006
A hurricane report came in and swept up the energy complex on Monday lifting the complex out of the hole. The National Oceanic and Atmospheric Administration released its annual storm outlook calling for an above normal hurricane season.

The NOAA is calling for ten hurricanes in the Atlantic this season which begins next week. Hurricane premium is back as the market is fearful that even one damaging storm in the Atlantic could deliver a knockout blow to energy infrastructure that is still recovering from last years hurricane season. The storm report seemed to ignite the complex which started the session deep in the hole and later reversed in dramatic fashion. Of course we have seen a lot of crazy reversals in this market over the last few sessions. And these reversals have not been confined to just this complex.

The oil complex is trying to find an identity. It has wanted to rally but has been thwarted by a lot of external factors such as questionable demand outlooks and the general speculative sell off in commodities in. A lot of talk of the bursting of the commodity bubble and fears that the Federal Reserve and its fear of inflation will try to stop the commodity rally by signaling to the market more aggressive interest rate increases. Still the last 16 interest rate increases hasn’t really killed demand for commodities yet and unless the Fed really gets more aggressive it is unlikely that another increase will do the trick.

What may have gone unnoticed by some yesterday was that it wasn’t just oil that recovered from dramatic early day losses, it was gold and silver as well. The dollar was strong in the morning and also reversed course changing the momentum. In fact not only is it possible that oil finished its downside correction, it is possible that other commodities like gold and silver have as well. Not that we are going to see all commodities scream like we have in the past month but we should see some consolation and a more solid move higher