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									                           CAMERON HANOVER
                              [DAILY ENERGY HEDGER - PREVIEW ] April 16, 2010




Early Evening Market Review for Friday
                                      Oil prices were under selling pressure from the opening bell
                                    on Friday, having sold off in trading overnight. In the trading
                                    overnight in Asia and in Europe, oil prices were being sold in
                                    reaction to a lower equities and a stronger US dollar. This was
                                    in sharp contrast to the previous six out of seven days, or the
                                    period ended on Wednesday, during which fundamentals had
                                    played a leading role. For the first five days of that period,
                                    ending on Tuesday, oil prices had declined based on heavy
                                    inventory levels. On Wednesday, they rallied after this week’s
DOE report showed a drawdown in crude oil stocks and a slightly larger-than-expected draw in gasoline
inventories. Demand had also shown

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                             CAMERON HANOVER
                                [DAILY ENERGY HEDGER - PREVIEW ] April 16, 2010

some improvements and that helped prices rally on Wednesday. Demand is still far from brisk.
Around 10:42 AM EST, on Friday, prices started falling as the stock market started dropping, based on
weakness in Goldman Sachs. Goldman has been accused of malfeasance, of putting together a portfolio
that had been designed by one of its customers as being ideal for selling short. The question is whether
Goldman had been forthcoming with that information as it sold the portfolio of CDO’s to other buyers.

As one of associates at FMXConnect put it, “Lawsuits mean uncertainty, and that is not good for any
holdings.” The more we thought about it, watching prices for everything, from the euro to gold to
equities and back to oil, falling, we realized that this quote had succinctly summed up the problem for
the whole day. Goldman losses doubled by noon, going from down $12 (around 10:30 AM) to off $24,
and the DJIA was down $130 at that time, as investors took profits in a number of financial stocks.

Sean Cota, of Cota & Cota Oil, NEFI and PMAA, sent us a note on Friday, pointing out that banks now
account for 65% of US GDP, up from 17% in 1995. There was a time when an assault on Goldman Sachs
could have been ignored by the equities markets, as a whole. But, that is not the case in 2010. CNBC
was calling it: “the Goldman Bombshell” by noon, with its anchors wondering if this could spell an end to
the bull market in equities. There was a sudden disillusion with the so-called “carry” trade, or the
gluttony for risk that is so frequently described simply as an “appetite.”

Friday’s decline in oil prices was significant. Seven of the last eight days have now been lower, and
Friday’s activity finally did hurt the market technically. What is most interesting is that the biggest loss
of the entire period came from Friday’s disillusion with Wall Street and risk rather than from the five or
six days during which traders were looking at oil market fundamentals. Technically, we do now have the
market in position to decline. If the interest in fundamentals continues and risk appetite goes away as a
major factor, this could be the start of a major decline in oil prices.
Crude Oil Daily Technical Chart




**Note: Full version to be released Monday morning**
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