Oil prices fell for the second straight trading session by nearly 3% to $50.14 per barrel on concerns that the swine influenza may affect the travel and hospitality industry resulting in a further delay in the recovery from the global recession. Investors feared a new blow to an already fragile global economy if trade flows are curbed and manufacturing is hit.

US Natural Gas reached its lowest level in more than 6 years on account of mild spring weather, high inventories and ongoing concerns about the slow economy. But the market could tighten soon on account of lower output and higher demand. There has been a decline in the number of drillings rigs in the US from 1600 to 731, low prices also force more producer shut-ins leading to lower output. At the same time switching from coal to cheaper gas also will increase demand.

Crude Oil Output growth from deep water areas may stagnate because current oil prices make it unprofitable to tap new deposits and large discoveries are dwindling. Production from deep water blocks grew 67% a year between 2005-08 following discoveries of Angola and Nigeria beating a growth of 1.3% in the World Crude Oil output.

PetroChina, the second largest company in China by market value, posted a profit that trails estimate for the first quarter. Its Net Income declined 35% to 2.8 bn USD from 4.32 bn USD.

Crude oil, due to strength in dollar and expectation of more build up in inventory, is expected to trade sideways to down during the day. Prices may test $48/barrel.

Natural Gas, after the prices touched six and a half years low, is expected to trade with a negative bias during the day. Swine flu is an additional negative factor which is weighing on Energy Complex especially on crude oil.

Crude oil looks to buy at dips rather than shorting as if one looks at chart its showing pattern when once prices give closing above 2560 we may see sharp upside but for that we need to see triangular breakout. Crude oil we believe 2450 remains strong support.