2012 is slowly starting to come alive and looks likely to be yet another very interesting year for global markets. The European debt crisis drags on while recent economic data out of the USA have surprised to the upside. Regardless, we are certain that there will not be a lack of opportunities on the markets this year.

We would like to take the opportunity to wish all our clients and readers a prosperous new year and look forward to work with everyone in managing their energy risk profitably in 2012.

Since our last weekly report on 19 December 2011, WTI increased by 8.6%, lifted by a year-end rally and concerns about tensions between the USA and Iran over Iran’s nuclear program.

Technically, we are slightly bullish while the price of WTI is above $100 support. The problem with our bullish outlook is that it is based to a large extent on strength derived from the Iran tensions. We expect a bounce from current levels to $105. Support is at $100 and then $98. A close below $98 would negate our bullish view and open the way to $95 and potentially $90. However, if $105 is breached convincingly, $110 is on the cards.

We expect a range of $100-105 for the rest of the week.

The Rand gained 2.5% since 19 December 2011. We expect that in the next 3 months the currency will continue to be driven mainly by what is happening in Europe.

Technically the Rand looks set to continue its range-bound trading. The range has shifted somewhat to R8-8.5/US$.

We expect a range of R8.1-8.5/US$ for the rest of the week.

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