Asian country economies have been, with the recent exception of Japan, steady and consistent growth and fuel consuming machines. Japan may reveal that it is back on it feet when this coming Monday they release gross domestic production numbers for Q2.
Japan's GDP data will be an important measure future fuel demand. While economists are expecting a contraction anywhere from 1.4% to 4.7%, any surprise data better than these contraction percentages, will put a bid on liquid energy futures.
Follow up strength or weakness indication from Japan will be given Thursday when they release trade data. Japan grew trade surplus to $900 million in June. If the July numbers continue showing this trade growth, energy futures, particularly heating oil futures, will receive additional support.
Technically energy charts are bearish. $88 provides solid short term resistance for crude. Should this level hold, bears have the opportunity to try to push down to the $70 handle. Should prices continue to fall, end users of gas and diesel will do well to lock in the lower prices, anticipating prices steadily moving higher in 2012.
