Crude Oil futures fell to 2 1/2 week lows to start the holiday-shortened week - falling below the $63 level for a brief period - as an easing of political tensions in Nigeria and Iran, coupled with the belief that US Gasoline supplies increased last week, had traders in a selling mood. The inauguration of Nigeria's new president and his call for an end to violence in the country's southern oil region was welcomed by rebels, which may bode well for an end to fighting in the West African nation. In addition, talks between US and Iranian officials over the weekend led traders to remove some of the risk premium from the market. Front month June Gasoline futures fell over 10 cents a gallon, as analysts are looking for another storage build in Gasoline last week. Current estimates are for a gain of 1.2 million barrels of Gasoline last week, which if true would be the 4th consecutive week of increased storage. Support for July Crude Oil is seen at the May 9th lows of $62.36, with resistance found at the 20-day moving average of $64.64. July Crude Oil closed at $63.15, down 2.05.
Lumber builds on bullish momentum.
Lead month July Lumber closed up the $10 limit for the second straight day, as continued short-covering by commodity funds and higher cash prices have created a classic "short squeeze." Traders report buy stops triggered above $280.00 in July, with few sellers willing to take the other side. Today's rally moved prices to 13-week highs, leaving an estimated 500 buy orders unfilled in the July contract alone. Price limits will be expanded to $15.00 tomorrow due to the consecutive limit moves. Cash traders report British Columbia spruce-pine-fir 2x4s were being quoted between $275.00 and $280.00, with few buyers found at these higher prices. This may limit further gains once weak bears have been driven out of the market. Resistance for July lumber is seen at $300.00, with support found at the 100-day moving average at $272.00. July Lumber closed at $286.20, up $10.00
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