Thursday, April 30, 2009

Crude Oil Thursday Evening Trading

Click on image to enlarge....

Crude Oil Closes Slightly Higher


June crude oil closed slightly higher on Thursday as it extends the rally off last week's low. The mid range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 51.62 are needed to confirm that a short term low has been posted. Closes below the reaction low crossing at 46.72 would renew this month's decline while opening the door for a possible test of the reaction low crossing at 45.08.

First resistance is today's high crossing at 51.94.
Second resistance is the reaction high crossing at 53.21.

First support is last Wednesday's low crossing at 46.72.
Second support is the reaction low crossing at 45.08.

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The June S&P 500 index closed slightly lower on Thursday as profit taking tempered early gains and the low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are diverging but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target. Closes below the 20 day moving average crossing at 847.51 are needed to confirm that a short term top has been posted.

First resistance is today's high crossing at 887.10.
Second resistance is January's high crossing at 937.00.

First support is the 10 day moving average crossing at 855.04.
Second support is the 20 day moving average crossing at 847.52.

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The June Dollar closed higher due to short covering on Thursday as it consolidated some of Wednesday's decline. The mid range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends the decline, March's low crossing at 83.14 is the next downside target. Multiple closes above the 10 day moving average crossing at 85.80 are needed to confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 85.54.
Second resistance is the 10 day moving average crossing at 85.80.

First support is today's low crossing at 84.03.
Second support is March's low crossing at 83.14.



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Crude Oil Steady Amid Flu Threats, Exxon Reports Lowest Profits In 5 Years


"Crude Oil Is Steady as Swine Flu Threatens Demand, Stocks Rally"
Crude oil was little changed as the World Health Organization said a pandemic declaration may come soon and economic reports signal that the worst of the global recession is over.

Fuel demand may drop as swine flu has the potential of being the first widespread influenza outbreak in 41 years. Initial U.S. jobless claims decreased last week, industrial output in Japan rose for the first time in six months, while U.K. consumer confidence climbed to the highest level in a year.

“We are probably looking at a pandemic which will reduce global growth to some extent,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. “There are increasing signs that the economy is starting to get better. In the end this.....Complete Story

"Shell CEO Says Job Cuts Imminent to Reduce Costs"
Royal Dutch Shell's Chief Executive Officer, Jeroen van der Veer, has confirmed that a reduction in the oil major's employment levels for 2009 is imminent in order to cut costs amid lower oil prices, according to Bloomberg, citing the Financial Times.

Specifically, van der Veer said that Shell must trim its costs to move forward with its intended investment plans while also keeping a close watch on its borrowing expenditures this year.

In March, Shell unveiled its plans to invest between $31-$32 billion in 2009 with dividends for the year expected to be some $10 billion, or a 5% increase of Q1 2009 dividend per share compared.....Complete Story

"Exxon Has Biggest Profit Drop in 5 Years as Oil Falls"
Exxon Mobil Corp., the world’s largest company by market value, posted its lowest profit in more than five years after the global recession sapped energy demand, pulling down oil and gasoline prices.

First quarter net income dropped 58 percent to $4.55 billion, or 92 cents a share, from $10.9 billion, or $2.02, a year earlier, Irving, Texas-based Exxon Mobil said today in a statement. Per-share profit was 3 cents lower than the average of analyst estimates compiled by Bloomberg. The earnings decline was Exxon Mobil’s biggest since 2002.....Complete Story


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Crude Oil Bulls Have The Near Term Advantage


June crude oil was higher overnight and is trading above resistance marked by the 20 day moving average crossing at 51.65.

Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 51.65 are needed to confirm that a short term low has been posted.

If June renews this month's decline, the reaction low crossing at 45.11 is the next downside target.

Thursday's pivot point, our line in the sand is 50.50

First resistance is the overnight high crossing at 51.94.
Second resistance is the reaction high crossing at 53.21.

First support is last Tuesday's low crossing at 46.72.
Second support is the reaction low crossing at 45.11.

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The June Dollar was lower overnight as it extends Wednesday's decline and spiked below support crossing at 84.10. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends this week's decline, March's low crossing at 83.14 is the next downside target. Closes above the 10 day moving average crossing at 85.77 would temper the near term bearish outlook in the market.

First resistance is the 20 day moving average crossing at 85.52.
Second resistance is the 10 day moving average crossing at 85.77.

First support is the overnight low crossing at 84.03.
Second support is March's low crossing at 83.14.

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The June S&P 500 index was higher overnight as it extends the rally off March's low. Stochastics and the RSI are diverging but are bullish signaling that sideways to higher prices are possible near term.

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target. Closes below the 20 day moving average crossing at 848.03 are needed to confirm that a short term top has been posted.

Thursday's pivot point, our line in the sand is 868.50

First resistance is the overnight high crossing at 887.10.
Second resistance is January's high crossing at 937.00.

First support is the 10 day moving average crossing at 856.07.
Second support is the 20 day moving average crossing at 848.03.

The June S&P 500 Index was up 14.40 points. at 883.30 as of 6:04 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.


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Wednesday, April 29, 2009

Crude Oil Closes Higher, Are Higher Prices Possible Near term?


June crude oil closed higher on Wednesday and the high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 51.57 are needed to confirm that a short term low has been posted. Closes below the reaction low crossing at 46.72 would renew this month's decline while opening the door for a possible test of the reaction low crossing at 45.08.

First resistance is last Friday's high crossing at 51.75.
Second resistance is the reaction high crossing at 53.21.

First support is last Wednesday's low crossing at 46.72.
Second support is the reaction low crossing at 45.08.

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The June Dollar closed lower on Wednesday and extended the decline off this month's high. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends the decline, the reaction low crossing at 84.10 is the next downside target. Multiple closes above the 10 day moving average crossing at 85.87 are needed to confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 85.59.
Second resistance is the 10 day moving average crossing at 85.87.

First support is today's low crossing at 84.24.
Second support is the reaction low crossing at 84.10.

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The June S&P 500 index closed higher on Wednesday as it extended the rally off March's low. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are diverging but remain bullish signaling that sideways to higher prices are possible near term.

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target. Closes below the 20 day moving average crossing at 844.32 are needed to confirm that a short term top has been posted.

First resistance is today's high crossing at 879.00.
Second resistance is January's high crossing at 937.00.

First support is the 20 day moving average crossing at 844.32.
Second support is last Wednesday's low crossing at 823.10.


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Exxon Mobil Corporation Declares Second Quarter Dividend


The Board of Directors of Exxon Mobil Corporation (NYSE:XOM) today declared a cash dividend of 42 cents per share on the Common Stock, payable on June 10, 2009 to shareholders of record of Common Stock at the close of business on May 13, 2009.

This second quarter dividend compares with $ .40 cents per share paid in the first quarter of 2009.

Through its dividends, the corporation has shared its success with its shareholders for more than 100 years and has increased its annual dividend payment to shareholders for 27 consecutive years.


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Shell Says Rebound Unlikely, Motor Fuel Supplies Decline


"Crude Oil, Gasoline Rise as Supplies of the Motor Fuel Decline"
Crude oil and gasoline rose after a government report showed an unexpected drop in U.S. inventories of the motor fuel as refiners reduced operating rates.

Gasoline supplies declined 4.7 million barrels to 212.6 million last week, the biggest reduction since September, the Energy Department said. Stockpiles were forecast to rise by 200,000 barrels, according to a Bloomberg News survey. Prices also increased after stocks rallied and the dollar dropped.

“Nobody was looking for a gasoline decline of that size,” said Sean Brodrick, natural resource analyst with Weiss Research in Jupiter, Florida. “This shows that refineries are keeping processing rates too low because there’s obviously some demand out there for gasoline.....Complete Story

"Iraq Launches Tenders for 60 Wells in Southern Oil Fields"
Iraq Sunday issued two tenders for foreign companies to drill a total of 60 wells in the country's large oil fields in southern Missan governorate in a bid to increase crude oil output, according to tender document posted on the oil ministry Web site.

The first tender, issued through Missan Oil Co., or MOC, an affiliate of the oil ministry, calls for the drilling of 15 wells in the Halfaya and Amarah oil fields, and another 15 wells in the Abu Ghirab.....Complete Story

"Shell Says Oil Unlikely to Rebound as Profit Slumps"
Royal Dutch Shell Plc, Europe’s largest oil company, said crude prices are unlikely to rebound in the next 12 to 18 months as it reported a 62 percent slump in first-quarter profit.

Net income declined to $3.49 billion, or 57 cents a share, from $9.08 billion, or $1.46, a year earlier, The Hague based company said today in a statement. Excluding inventory changes and one time items, earnings beat analysts’ estimates.

Shell follows BP Plc, its smaller rival, in posting lower earnings after oil prices plunged about $100 from a record. Chief Executive Jeroen van der Veer has pledged to pay out about $10 billion in dividends this year, even as Shell funds the industry’s biggest spending program to revive production growth......Complete Story


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Crude Oil Trades Higher On Weaker Dollar, Fed Announcement Day


Crude is trading higher benefiting from a weakening dollar and the SP 500 showing strength typical of a Fed interest rate announcement day.

June crude oil was higher overnight hinting that the two day correction off last Friday's high might be ending. Stochastics and the RSI are neutral to bullish hinting that a short term low might be in or is near.

Closes above the 20 day moving average crossing at 51.55 are needed to confirm that a short term low has been posted.

If June renews this month's decline, the reaction low crossing at 45.11 is the next downside target.

Wednesday's pivot point, our line in the sand is 49.32

First resistance is the 20 day moving average crossing at 51.55.
Second resistance is the reaction high crossing at 53.21.

First support is last Tuesday's low crossing at 46.72.
Second support is the reaction low crossing at 45.11.

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The June Dollar was lower overnight signaling that a two day short covering bounce off last Friday's low has likely ended. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends last Friday's decline, the reaction low crossing at 84.10 is the next downside target. Closes above the 10 day moving average crossing at 85.88 would temper the near term bearish outlook in the market.

First resistance is the 20 day moving average crossing at 85.60.
Second resistance is the 10 day moving average crossing at 85.88.

First support is last Friday's low crossing at 84.63.
Second support is the reaction low crossing at 84.10.

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The June S&P 500 index was higher overnight as it consolidates above the 10 day moving average crossing at 852.96. Stochastics and the RSI are diverging and are turning neutral warning bulls that a short term top and possible trend change might be near.

Closes below the 20 day moving average crossing at 843.86 are needed to confirm that a short term top has been posted. If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target.

Wednesday's pivot point, our line in the sand is 851

First resistance is the reaction high crossing at 867.00.
Second resistance is January's high crossing at 937.00.

First support is the 20 day moving average crossing at 843.86.
Second support is the reaction low crossing at 823.10.

The June S&P 500 Index was up 8.20 points. at 860.00 as of 5:57 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.

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Key Market Events To Watch For Wednesday............

10:30 AM ET.

Apr 24 US Energy Dept Oil Inventories

Crude Oil Stocks (previous 370.6M)

Crude Oil Stocks (Net Change) (expected +2.3M; previous +3.85M)

Gasoline Stocks (previous 217.3M)

Gasoline Stocks (Net Change) (expected -300K; previous +802K)

Distillate Stocks (previous 142.3M)

Distillate Stocks (Net Change) (expected +200K; previous +2.68M)

Refinery Usage (expected 83.4%; previous 83.4%)


Two-Day FOMC Meeting continues; interest rate decision expected around 2:15 p.m. EDT


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Tuesday, April 28, 2009

Oil Falls For Second Day, Valero Profits Up


"Oil Falls a Second Day on Concern Swine Flu Will Curb Fuel Use"
Crude oil fell for a second day on concern that fuel demand will drop as the swine-flu outbreak curtails travel and delays a recovery from the global recession.

Oil, gold and copper declined as the World Health Organization raised its global pandemic alert to the highest since the warning system was adopted in 2005, saying the disease is not containable. Crude rose in eight of the past 10 weeks as the stock market climbed on speculation that the economy and energy consumption would rebound later this year.

“There’s a potential that a swine-flu outbreak will crimp economic growth,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “There’s also recognition that the recent rally was overly optimistic. Demand isn’t recovering.....Complete Story

"OPEC Oil Price Eases Early In The Week"
The price for oil produced by the Organization of the Petroleum Exporting Countries (OPEC) shed nearly $0.80 Monday, the group announced Tuesday.

After rising to just below the 50 dollar mark at the end of last week, one barrel (158 liters) of OPEC crude oil fell by $0.76 to settle at $49.21 on Monday.

The Vienna based organization calculates a basket price based on 12 brands produced by its members.....Complete Story

"Valero Energy Profit Rises on Higher Refining Margins"
Valero Energy Corp., the largest U.S. oil refiner, said first-quarter profit rose 18 percent on increased margins for processing crude into gasoline and other petroleum products.

Net income rose to $309 million, 59 cents a share, from $261 million, or 48 cents, a year earlier, San Antonio-based Valero said today in a statement. The per-share results beat by 9 cents the average of 18 analyst estimates compiled by Bloomberg. Sales fell 50 percent to $13.8 billion.

Valero benefited from lower costs and a rebound in gasoline prices as U.S. refiners cut processing rates faced with reduced fuel demand in an economy hobbled by recession. The company earned an average of $8.77 for each barrel of oil it processed in the first quarter.....Complete Story


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Crude Oil Looks To Move Lower On Stronger Dollar, Swine Flu Outbreak


Market news just seems to be building against crude this week. The Mexican Flu outbreak, the stronger dollar and the SP 500 trending lower all are weighing heavily on crude oil. We appear to be range bound in the 48-53 range for now and while the future seems bearish for oil traders they appear more than willing to pile in long when meeting support.

For Tuesday we need to touch 48 for me to start building a scalp/long day trade position. Under 47 we go 100% long. In this market I will be 100% out if we rally any where near 1st resistance at 51.69

Tuesday's pivot point, our line in the sand is 49.85

1st resistance is 51.69
2nd resistance is 53.29

1st support is 48.25
2nd support is 46.41



Market news to watch for.................

4:30 PM ET. Apr 2...API Oil Industry Report

....................Crude Stocks (Net Change) (previous -1.01M)

....................Gasoline Stocks (Net Change) (previous +107K)

....................Distillate Stocks (Net Change) (previous +458K)

....................Refinery Runs (previous 82.1%)


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Monday, April 27, 2009

PetroChina Misses Analyst Estimates, Shell Profits Plummet


"PetroChina First Quarter Net Falls, Trailing Analyst Estimates"
PetroChina Co., the world’s second largest company by market value, posted a profit that trailed analysts’ estimates for the first quarter of what will be its “most challenging” year.

Net income declined 35 percent to 18.96 billion yuan ($2.8 billion) from 29.3 billion yuan a year earlier, the Beijing based company said in a statement to the Shanghai exchange yesterday. That’s worse than a median estimate of 19.5 billion yuan in a Bloomberg survey of three analysts.

China’s economy grew at its weakest pace in nearly a decade in the first quarter, and PetroChina faces “huge difficulties” in 2009 as the global financial crisis reduces demand for oil products, it said last month. Asia’s biggest crude producer said it will cut costs and reduce risk in the second quarter, and China passed a $585 billion stimulus package to revive growth.....Complete Story

"Florida House Members Mull Offshore Drilling Bill"
A bill that would allow oil drilling off Florida's coast is ready for a vote in the state House of Representatives.

Today legislators questioned Rep. Charles Van Zant, R-Keystone Heights, for more than an hour, voicing concern about the bill that would allow the governor and Cabinet to approve drilling leases between 3 and 10.5 miles off the state's coast. They expressed worries that drilling could hurt the tourism industry, the seafood industry, and the environment.

Van Zant assured members that drilling technology has advanced to the point that there is minimal risk. He said opening the coast to oil and natural gas exploration could create thousands of jobs.....Complete Story

"Shell, BP Profits May Drop Most In Five Years On Oil"
Royal Dutch Shell Plc and BP Plc, Europe’s largest oil companies, may post the biggest drop in quarterly earnings in at least five years after the recession dragged down crude prices.

U.S. oil futures averaged $43.31 a barrel in the quarter, 56 percent lower than a year earlier, after plunging from a record $147.27 reached in July. The companies responded by shelving projects and demanding price cuts from suppliers. BP may scale back its joint Sunrise oil-sands project in Alberta to cut expenses, while Shell has said industry costs could fall as much as 50 percent.

“We are going to see a very substantial drop in income and there’s very little they can do about costs in the short-term,” said Colin Morton, who helps manage about $2 billion, including BP and Shell stock, at Rensburg Fund Management in Leeds, England. “It’s going to be quite a tough period.”.....Your keyword


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Crude Oil Market Seems to Have The Flu This Morning


AS we go into regular trading hours on Monday crude oil is down over $3.00, near the 1st support level of $48. Common sense says that most traders will be buying these levels as we appear to be range bound in the 48 - 54 area.

The bears seem to have the technical advantage at this point and we will trade that side of crude oil. We are hesitant to play the long side here as it also looks like the SP 500 is willing to consolidate recent rally gains in the market. We will keep a close eye on the SP's ability to trade within the 830-880 level.

The U.S. dollar is also trading higher this morning further pressing on crude oil prices.

Today's pivot point, our line in the sand is 50.77

1st resistance 52.47
2nd resistance 53.46

1st support 49.78
2nd support 48.08


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Sunday, April 26, 2009

OPEC General Sec. See No Cuts But Schlumberger Does


"OPEC Secretary General Doesn't See New Oil Cuts in May"
OPEC Secretary General Abdalla Salem El-Badri said he doesn't expect the oil cartel to cut production when the group meets next month, despite signs of even weaker crude demand and swelling oil inventory in big energy consuming nations. The Organization of Petroleum Exporting Countries needs to fully implement an agreement announced back in December to remove 4.2 million barrels a day from world markets before embarking on more reductions, El-Badri said. "We need to take all that off the market before we can talk about new cuts....Complete Story

"Oil Falls on Speculation Slow Recovery Will Limit Energy Demand"
Crude oil fell for the first time in five days in New York on speculation a slow recovery from the global recession may limit demand. The economy in the U.S., the world’s largest oil consumer, will continue to contract “for some time,” Lawrence Summers, director of the White House National Economic Council, said yesterday. Increased output by non OPEC producers has left the market oversupplied by about 720,000 barrels a day, said Algerian Oil Minister Chakib Khelil. “It’s difficult to see a really sustained rally in oil,” said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. “There are so many downside risks to the global economy....Complete Story

"Schlumberger CFO: Another Headcount Reduction Likely"
Schlumberger's Chief Financial Officer, Simon Avat, said Friday the oilfield services major will likely reduce its employment levels in the coming months, Dow Jones reports. The world's largest oilfield services company, Schlumberger cut some 5,000, or 6%, of its 84,000 global employees in the first round of layoffs announced in January amid a worldwide downturn in oil and gas activity and weakened crude prices. In the last five years, Schlumberger, whose principal offices are in Houston, Paris and The Hague, recruited 11,613 engineers from 140 countries and 8,754 specialists....Complete Story


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Has The Trend Changed For Crude Oil?

Do you need any more proof of where crude oil is headed and where the SP 500 may be following it?

Friday, April 24, 2009

Oil Rises Fourth Day as Stocks, Dollar Outweigh Demand Concern


Crude oil rose for a fourth day, the longest stretch in two months, as advancing equities and a weaker dollar outweighed concern about lower fuel demand.

Oil gained 3.9 percent after better than expected earnings from American Express Co., Ford Motor Co. and Microsoft Corp. sent stocks higher. Prices fell earlier on signs the Organization of Petroleum Exporting Countries isn’t cutting output fast enough to reduce a supply glut. U.S. crude stockpiles are at their highest in nearly 19 years.

“The strength in equity markets is the main reason oil prices are higher,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. “We are ignoring incredibly high inventories.”

Crude oil for June delivery rose $1.93 to settle at $51.55 a barrel at 2:50 p.m. on the New York Mercantile Exchange. Futures are up 16 percent this year. The June contract declined 1.8 percent this week.....Complete Story


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Schlumberger First Quarter Net Down 30% On Reduced U.S. Drilling


Schlumberger Ltd.'s (SLB) first quarter earnings fell 30% amid plummeting drilling activity, exceeding analysts' pessimistic expectations of a bigger decline amid a sharp drop in drilling activity for oil and gas.

Chief Executive Andrew Gould, however, said Friday in a conference call that Schlumberger would have difficulty replicating its first quarter performance amid lower prices for services and uncertainty in U.S. natural gas drilling.

Gould said Schlumberger's customers are seeking and obtaining lower prices for services. He said the company's first quarter performance would be "extremely difficult" to repeat as those renegotiated prices take hold.

"A lot of price concessions that we have given will flow though in subsequent quarters," Gould said.

Producers have cut back on drilling as low oil and gas prices have left many projects unprofitable and left less cash for those that could make money. Earlier this month, the number of drilling rigs in the U.S. was off by more than half from September to 975, according to Baker Hughes Inc. (BHI), the first drop below 1,000 since 2003....Complete Story


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Crude Advances On Dollar Weakening Against The Euro

Crude oil is trading higher as commodities rise sharply on the dollar trading lower against the Euro in overnight trading. The markets in general are helping oil move higher, but traders all will remain tentative today on news of bank stress test results expected around 2 P.M. est.

Today's pivot point, our line in the sand is 49.30.

First resistance is 50.23
Second resistance is 50.85

First support is 48.68
Second support is 47.75

Thursday, April 23, 2009

Crude Oil Closes Higher, Bears Still Have Near Term Advantage


June crude oil closed up $0.58 at $49.43 a barrel today. Prices closed near mid range today. Crude oil bears still have the near term technical advantage. The next downside price objective for the crude oil bears is to produce a close below solid technical support at $44.00.

The U.S. stock indexes closed firmer today. Trading has turned choppy this week. Banking worries and bearish corporate earnings reports this week are keeping the bulls tentative. The recent uptrends in the stock indexes are "rolling over" on the daily charts, which is a bearish technical clue.

June gold futures closed up $14.50 at $907.00 today. Prices closed nearer the session high again today on short covering and fresh speculative buying and amid a weaker U.S. dollar. Prices did hit a fresh three week high today as bulls and bears are back on a level near term technical playing field. Prices are still in a two month old downtrend on the daily bar chart, however.

The June U.S. dollar index closed down 92 points at 85.56 today. Prices closed near the session low today. Bulls are fading quickly. Bulls' next upside price objective is to close prices above solid technical resistance at this week's high of 87.22.



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Crude Oil Closes Slightly Higher, Florida OK's Drilling Bill, NOV Reports It's largestDecline


"Oil Rises as Dollar Drops, Bolstering Demand for Commodities"
Crude oil rose for a third day in New York as the dollar dropped against the euro, bolstering the appeal of commodities. Oil climbed as much as 2.2 percent as the falling U.S. currency increased demand for crude and precious metals as a hedge against inflation. The U.S. Energy Department reported yesterday that crude stockpiles rose for a seventh week to the highest since September 1990. “There’s a hard asset play due to dollar weakness,” said John Kilduff, senior vice president of energy at MF Global Inc. in New York. “Until there is firm evidence that the stimulus package is working and the economy is growing....Complete Story

"Florida House Oks Bill to Drill Off Coast"
State lawmakers gave initial approval Tuesday to a bill that could allow offshore drillers a chance to set up rigs within sight of Florida's Gulf of Mexico beaches. A surprise introduction of legislation by Dean Cannon, R- Winter Park, slated to be House leader next year, calls for lifting the state's decades-old ban on rigs and giving the governor and Cabinet authority over proposals for drilling between 3 to 10 miles from shore. Lucrative move or 'pure insanity'? Industry boosters and legislators praised the concept in a meeting of the House Policy Council, calling it potentially lucrative for an economically depressed state and a needed step toward energy independence....Complete Story

"National Oilwell Varco Drops After Pace of New Orders Slumps"
National Oilwell Varco Inc., the largest U.S. maker of oilfield equipment, had its biggest decline this year in New York trading after its pace of new business slowed by more than half for a second straight quarter. The company’s order backlog, which began the year at $11.1 billion, shrank to $9.6 billion in the first quarter, according to a statement today by the Houston-based manufacturer. National Oilwell Varco booked $240 million in new orders, net of $32 million in work that was canceled, down 67 percent from its fourth-quarter pace. Net income rose 18 percent from a year earlier on the strength of past bookings....Complete Story


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Conoco-Phillips Reports 80 Percent Decline In Profits


ConocoPhillips said Thursday its first quarter profit tumbled 80 percent from a year ago as sharply lower crude and natural gas prices walloped results at the nation's third largest oil company.

But the results easily beat Wall Street expectations and Conoco shares rose 3.6 percent, or $1.36, to $39.75. The Houston based company said net income for the January-March period amounted to $840 million, or 56 cents per share, versus $4.14 billion, or $2.62 per share, a year earlier.

Analysts surveyed by Thomson Reuters had expected earnings of 42 cents a share, on average. Revenue fell 44 percent to $30.7 billion from $54.9 billion a year ago.

ConocoPhillips was the first of the major oil companies to report first-quarter results, which as a whole are expected to be the worst in years as the global economic downturn saps demand for energy. After peaking around $150 in July, the price of crude tumbled....Complete Story


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Crude Oil Struggles At The $50 Level, Unemployment Numbers Weigh On Demand


June crude oil was higher due to short covering overnight as it consolidates some of this week's decline. But higher unemployment numbers may weigh on demand and lower than expected numbers from UPS this morning look to weigh on the entire market.

Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends this week's decline, the reaction low crossing at 45.11 is the next downside target.

Closes above the 20 day moving average crossing at 51.99 are needed to confirm that a short term low has been posted.

Today's daily pivot point, our line in the sand is 48.48

First resistance is the 10 day moving average crossing at 51.18.
Second resistance is the 20 day moving average crossing at 51.99.

First support is Tuesday's low crossing at 46.72.
Second support is the reaction low crossing at 45.11.

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The June Dollar was lower due to profit taking overnight as it consolidates some of Monday's rally. Stochastics and the RSI are turning neutral hinting that a short term top might be in or is near.

Closes below last Monday's low crossing at 84.72 would confirm that a short term top has been posted. If June extends Monday's rally, the reaction high crossing at 88.26 is the next upside target.

First resistance is Monday's high crossing at 87.22.
Second resistance is the reaction high crossing at 88.26.

First support is the 10 day moving average crossing at 85.97.
Second support is the 20 day moving average crossing at 85.70.

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The June S&P 500 index was higher overnight [Index was up 6.80 points. at 843.60 as of 5:58 AM CST.] due to short covering as it consolidates above the 20 day moving average crossing at 833.00. Stochastics and the RSI are bearish signaling that a short term top appears to have been posted. Closes below the 20 day moving average crossing at 833.00 are needed to confirm that a short term top has been posted.

If June renews the rally off March's low, January's high crossing at 937.00 is the next upside target.

The daily pivot point is 844.

First resistance is last Friday's high crossing at 867.00.
Second resistance is January's high crossing at 937.00.

First support is the 20 day moving average crossing at 833.00.
Second support is the reaction low crossing at 802.60.

The June S&P 500 Index was up 6.80 points. at 843.60 as of 5:58 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.


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Wednesday, April 22, 2009

Crude Oil Closes Slightly Higher, Bears Still Have Technical Advantage Near Term


June crude oil closed up $0.35 at $48.90 a barrel today. Prices closed nearer the session high today on more short covering following strong losses on Monday. Prices are pausing after the big down day on Monday, and this pause is not bullish. Crude oil bears still have the near term technical advantage.

The June U.S. dollar index helped crude oil by closing down 45 points at 86.44 today, closing near the session low's. Bulls still have the slight near term technical advantage, but need to show fresh strength soon to keep it.

The U.S. stock indexes did not help crude oil's cause by closing mostly lower today and near their session lows. Some more banking worries today and bearish corporate earnings reports this week are keeping the bulls tentative. The recent uptrends in the stock indexes will begin to "roll over" on the daily charts and start to produce bearish chart signals if more price weakness occurs this week.




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Crude Oil Futures Increase Following U.S. Stock Market Gains, OPEC Prices Slip


"Crude Oil Futures Increase Following U.S. Stock Market Gains"
Crude oil futures rose for a second day as U.S. equities gained and the U.S. dollar dropped. Oil rebounded as the stock market advanced as a gauge of home prices unexpectedly improved and General Electric Co. led a rally in industrial companies. Prices dropped earlier on an Energy Department report that oil inventories rose 3.86 million barrels to 370.6 million, the highest since September 1990. “There are a large number of financial professionals trading oil who are paying more attention to the equity markets and the U.S. dollar, while ignoring the fundamentals of the oil market,” said Tim Evans....Complete Story

"OPEC's Oil Price Slips Below $48.50"
The price for oil produced by the Organization of Petroleum Exporting Countries (OPEC) shed more than $1 Tuesday, settling at $48.49, the group announced Wednesday.
One barrel (158 liters) of OPEC crude oil was $1.10 lower on Tuesday than on the previous day. The price has dropped by $2.96 since last Friday. The Vienna based cartel calculates an average price based on 12 brands produced by its members....Complete Story

"Statoil’s Arctic Status Threatened as Exxon, Shell Make Bids"
StatoilHydro ASA may see its dominance eroded in Norway’s Arctic as Exxon Mobil Corp. and Royal Dutch Shell Plc bid in the country’s first frontier oil and natural gas licensing round for three years. Norway has offered 28 complete and partial blocks in the Barents Sea off its northern tip and 51 in the Norwegian Sea, which straddles the Arctic Circle. The permits will be awarded “sometime in the spring,” said Jon Evang, an Oil Ministry spokesman, without being more specific....Complete Story


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Crude Oil Falls On Inventory Gains

Crude oil falls as inventories increased sharply across the board. As of 10:40 EST crude oil is trading below the critical 48.50 level as institutional traders look to defend $45.00 this week. Next target is 1st support at $48.02.


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Crude Oil Lower As Earnings Reports Bring Down The Market's


June crude oil traded higher due to short covering overnight as it consolidates some of this week's decline. But has traded below 48.0 in pre market trading as financial's weigh on the overall markets.

Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends this week's decline, the reaction low crossing at 45.11 is the next downside target.

Closes above the 20 day moving average crossing at 52.22 are needed to confirm that a short term low has been posted.

Traders appear to be focused on the 48.50 50% retracement level as their line in the sand.

First resistance is the 10 day moving average crossing at 51.43.
Second resistance is the 20 day moving average crossing at 52.22.

First support is the overnight low crossing at 48.02.
Second support is the reaction low crossing at 45.11.

10:30 AM ET. Apr 17..US Energy Dept Oil Inventories

....Crude Oil Stocks (previous 366.7M)

....Crude Oil Stocks(Net Change}(expected+2.5M;previous +5.6M)

....Gasoline Stocks(previous 216.5M)

....Gasoline Stocks(Net Change)(expected-900K;previous-900K)

....Distillate Stocks(previous 139.6M)

....Distillate Stocks(Net Change)(expected-900K;previous-1.2M)

....Refinery Usage(expected 81%;previous 80.4%)


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The June S&P 500 index was lower overnight as it consolidates some of Tuesday's rally. Once again it appears the markets are allowing the financial's to take the lead and poor earnings reports this morning from Morgan Stanley are weighing on the market.

Stochastics and the RSI are turning bearish signaling that a short term top appears to have been posted.

Closes below the 20 day moving average crossing at 831.56 are needed to confirm that a short term top has been posted.

If June renews the rally off March's low, January's high crossing at 937.00 is the next upside target.

Wednesday's pivot point, our line in the sand, is 840.

First resistance is last Friday's high crossing at 867.00.
Second resistance is January's high crossing at 937.00.

First support is the 20 day moving average crossing at 831.56.
Second support is the reaction low crossing at 802.60.

The June S&P 500 Index was down 3.70 points. at 844.00 as of 6:05 AM CST. Overnight action sets the stage for a lower opening by the June S&P 500 index when the day session begins later this morning.

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The June Dollar was lower due to light profit taking overnight as it consolidates some of Monday's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If June extends Monday's rally, the reaction high crossing at 88.26 is the next upside target. Closes below last Monday's low crossing at 84.72 would confirm that a short term top has been posted.

First resistance is Monday's high crossing at 87.22.
Second resistance is the reaction high crossing at 88.26.

First support is the 10 day moving average crossing at 85.94.
Second support is the 20 day moving average crossing at 85.61.


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Tuesday, April 21, 2009

This Week In Crude Oil

Click on image to enlarge.....

Crude Oil Closes Higher After Trading At Six Week Low


June crude oil closed up $0.18 at $48.69 a barrel today. Prices closed nearer the session high today on short covering following strong losses on Monday. Prices hit a fresh six week low early on today and some near term chart damage has been inflicted this week. Crude oil bears have the near term technical advantage.

The U.S. stock indexes closed higher today and nearer their session high on a rebound from solid losses on Monday. Some positive comments from U.S. Treasury Secretary Geithner today helped the market. However, a slew of upcoming corporate earnings reports this week will likely keep the bulls tentative. The recent uptrends in the stock indexes will begin to "roll over" on the daily charts and start to produce bearish chart signals if more price weakness occurs this week.

June gold futures closed down $5.80 at $881.70 today. Prices closed near the session low today amid a rebound in the U.S. stock market today. The gold bears still have the overall near term technical advantage. Prices are in a two month old downtrend on the daily bar chart.

The June U.S. dollar index closed down 16 points at 86.82 today. Prices closed near mid range today. Bulls still have the near term technical advantage. Bulls' next upside price objective is to close prices above solid technical resistance at 89.00.


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Crude Oil Below $45, SABIC's First Loss, Iran Supports OPEC Cut


"Nymex Crude Falls Below $45 Barrel On Economic Fears, Expiration"
Crude oil futures were down Tuesday, slipping below $45 a barrel on lingering concerns about the U.S. economy.

Light, sweet crude for May delivery was down $1.82, or 4%, at $44.06 a barrel on the New York Mercantile Exchange, after falling as low as $43.83 a barrel. June Brent crude on the ICE futures exchange fell $1.37 to $48.49 a barrel.

For the past month, oil prices have held up relatively well, hovering around or above the $50 a barrel mark despite domestic crude supplies swelling to 18 year highs. But crude sliced nearly a tenth off its value Monday, plunging with equity markets as investors worried about the health of U.S. banks, despite a series of better than expected quarterly results....Complete Story

"SABIC Drops After First Quarterly Loss Since 2001"
Saudi Basic Industries Corp., the world’s largest chemicals maker by market value, dropped the most in five months in Riyadh trading after reporting a surprise quarterly loss on slumping demand for plastics and fertilizers.

Sabic fell 9.9 percent to 42 riyals, the biggest decline since Nov. 22. The first quarter net loss was 974 million riyals ($259.7 million) after booking 1.18 billion riyals in goodwill writedowns, the Riyadh based company said today in a statement. The loss is the company’s first since the last quarter of 2001 and misses analyst estimates of 1.02 billion riyals in profit.

The first simultaneous recession for six decades in the U.S., Japan and Germany forced Sabic to slash polyethylene and polypropylene prices and cut its workforce as demand weakened for plastics....Complete Story

"Iran Supports OPEC Output Cut Conditionally"
Iran said on Thursday that it will conditionally support OPEC output cut, the official IRNA news agency reported.

Iran's representative to OPEC Seyyed Mohammad-Ali Khatibi voiced the conditional support to some reporters on the sidelines of an oil gas show in Tehran, MENA said.

"The OPEC decision to cut its output at a meeting in May in Vienna depends on the market condition," Khatibi was quoted as saying, adding "if there is an oversupply of oil (in the market), the output cut will be considered."....Complete Story


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Crude Oil Trading Lower, Breaking Through Critical Levels


Crude oil is trading lower as it extends Monday's breakout to the downside of this spring's symmetrical triangle formation.

Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If May extends Monday's decline, the reaction low crossing at 43.74 are needed to confirm that a short term top has been posted.

Closes above the 20 day moving average crossing at 50.38 are needed to confirm that a short term low has been posted.

Tuesday's pivot point, our line in the sand is 49.61

First resistance is the 10 day moving average crossing at 49.15.
Second resistance is the 20 day moving average crossing at 50.38.

First support is the overnight low crossing at 45.19.
Second support is the reaction low crossing at 43.74.

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4:30 PM ET. Apr 17...API Oil Industry Report

.....................Crude Stocks (Net Change) (previous +6.5M)

.....................Gasoline Stocks (Net Change) (previous -613K)

.....................Distillate Stocks (Net Change) (previous +87K)

.....................Refinery Runs (previous 79.9%)

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The June S&P 500 index was steady to slightly higher due to short covering in the overnight trading session as it consolidates some of Monday's decline, but has now moved lower has we near the regular trading session.

Stochastics and the RSI are overbought and are turning bearish signaling that a short term top appears to have been posted. Closes below the 20 day moving average crossing at 828.86 are needed to confirm that a short term top has been posted.

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target.

The pivot point, our line in the sand is 843.25.

First resistance is last Friday's high crossing at 867.00.
Second resistance is January's high crossing at 937.00.

First support is the 20 day moving average crossing at 828.86.
Second support is the reaction low crossing at 802.60.

The June S&P 500 Index was up 1.50 points. at 834.20 as of 5:51 AM CST. But has now sharply sold off [6+ points] before the opening of regular trading hours.

It had appeared that the overnight action set the stage for a steady to higher opening by the June S&P 500 index when the day session begins later this morning.

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The June Dollar was lower due to light profit taking overnight as it consolidates some of Monday's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If June extends Monday's rally, the reaction high crossing at 88.26 is the next upside target. Closes below last Monday's low crossing at 84.72 would confirm that a short term top has been posted.

First resistance is Monday's high crossing at 87.22.
Second resistance is the reaction high crossing at 88.26.

First support is the 10 day moving average crossing at 85.82.
Second support is the 20 day moving average crossing at 85.48.


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Monday, April 20, 2009

Crude Oil Closes Lower, Pressured By Dollar and Stocks


June crude oil closed down $4.02 at $48.45 a barrel today. Prices closed near the session low today, hit a fresh five week low and saw a bearish downside "breakout" from a wedge pattern on the daily chart. Crude oil bears have regained the near term technical advantage. A big drop in the stock market today and a stronger U.S. dollar helped to pressure crude oil.

The June U.S. dollar index closed up 71 points at 87.00 today. Prices closed near the session high and hit a fresh four week high today. Bulls have regained the near term technical advantage.

The U.S. stock indexes closed solidly lower today and near their session lows. The bulls faded today and need to show fresh power soon, or else the recent uptrends on the daily charts will begin to "roll over" and start to produce bearish chart signals.

A heavy slate of corporate earnings reports are due out this week and traders will examine them very closely. It's likely that most of those reports will encourage the stock index bears.

Haliburton Profits Tumble, Oil Falls the Most in Seven Weeks


"Oil Falls the Most in Seven Weeks as Dollar Gains, Stocks Drop"
Oil fell the most in seven weeks as a stronger dollar reduced the appeal of commodities and on speculation supplies will rise as the recession reduces demand.

Oil dropped as the dollar rose to a one-month high versus the euro, making crude less attractive as a currency and inflation hedge. An Energy Department report last week showed U.S. crude oil inventories climbed to the highest level since September 1990 as demand dropped.

“The strength of the dollar has prompted a selling in the oil market,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We repeatedly shift from concentrating on the fundamentals of high inventories and low demand on one hand and hopes of recovery later this year. The fundamental picture has reasserted itself today.”....Complete Story

"Halliburton 1Q Profit Tumbles, Cuts Jobs"
Halliburton Co. kicked off the oil sector's first-quarter earnings period on a dour-but-not-unexpected note Monday, reporting net income that tumbled 35 percent from a year ago and offering a poor outlook. It also said it cut more than 2,000 jobs in the first three months of the year.

The company, which has corporate headquarters in Houston and Dubai, was hurt as oil and natural gas producers, stung by low prices, cut back on exploration and drilling, particularly in North America. That's bad news for service companies like Halliburton, which help producers with drilling, reservoir management and other oilfield work.

A major barometer of oil-patch activity is the U.S. rig count, which has fallen more than 50 percent since the end of August. Analysts say the count is likely to fall even more — perhaps another 20 to 30 percent — as producers continue to scale back spending amid bloated oil and gas supplies and weak demand....Complete Story


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Crude Oil Opens Down, Lower Prices Possible Near Term


May crude oil was sharply lower overnight and appears to be breaking out to the downside of this spring's symmetrical triangle formation.

Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term.

Closes below the reaction low crossing at 47.26 are needed to confirm that a short term top has been posted.

Closes above March's high crossing at 54.66 are needed to confirm an upside breakout of the current consolidation pattern.

The pivot point for Monday is 50.44

First resistance is the 20 day moving average crossing at 50.89.
Second resistance is the reaction high crossing at 52.45.

First support is the reaction low crossing at 47.37.
Second support is the reaction low crossing at 47.26.

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Overnight action sets the stage for a lower opening by the June S&P 500 index when the day session begins later this morning.

The June S&P 500 index was lower due to profit taking overnight as it consolidates some of its recent gains. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are still possible near term.

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target. Closes below the 20 day moving average crossing at 829.14 are needed to confirm that a short term top has been posted.

The pivot point, our line in the sand, for Monday is 864.25

First resistance is last Friday's high crossing at 867.00.
Second resistance is January's high crossing at 937.00.

First support is last Wednesday's low crossing at 831.70.
Second support is the 20 day moving average crossing at 829.14.

The June S&P 500 Index was down 11.40 points. at 855.40 as of 5:45 AM CST.

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The June Dollar was higher overnight and is trading above the reaction high crossing at 86.62 thereby renewing the rally off March's low. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

Closes below last Monday's low crossing at 84.72 would confirm that a short term top has been posted.

First resistance is the overnight high crossing at 86.85.
Second resistance is the reaction high crossing at 88.26.

First support is the 10 day moving average crossing at 85.62.
Second support is the 20 day moving average crossing at 85.33.

Friday, April 17, 2009

Crude Oil Weekly Pivot Points

Click Image To Enlarge

Chinese Refining Price Increases, California Says No To New Drilling


"Crude Oil Rises as Chinese Refineries Increase Processing Rates"
Crude oil rose after a report showed that Chinese refineries bolstered processing rates for the first time in five months, signaling the government’s economic stimulus measures improved fuel demand. China refined 29.4 million metric tons of crude, or about 6.92 million barrels a day, in March, the China Mainland Marketing Research Co. said in a statement today. That’s up 0.7 percent from a year earlier. U.S. stocks drifted between gains and losses....Complete Story

"California Officials Say No to New Offshore Drilling"
California officials expressed unanimous opposition Thursday to new offshore oil and gas drilling in a meeting U.S. Interior Secretary Ken Salazar held to gauge public sentiment on the issue. Opening the California coast to drilling for oil and natural gas would be an environmental and economic disaster for the state, said Sen. Barbara Boxer, D-Calif. The most populous U.S. state relies on tourism, recreation and other coastal industries....Complete Story

"Norway Oil Industry Seen At Risk If New Areas Not Opened"
Norway's oil and gas production and industry risk going into serious decline by the mid-2020s if a ban on exploration in unexplored offshore areas in the North isn't lifted quickly, oil chiefs say. Combined oil and gas production from Norway, the second-biggest gas exporter to Europe after Russia, and the world's fifth-largest oil exporter, is at a peak that operators hope to sustain until at least 2015, while stemming the decline beyond that....Complete Story


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Bears Seem To Have Term Advantage On Crude Oil


May crude oil was slightly lower overnight as it extends this month's trading range. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term.

Closes below the reaction low crossing at 47.26 are needed to confirm that a short term top has been posted. Closes above March's high crossing at 54.66 are needed to confirm an upside breakout of the current consolidation pattern.

First resistance is the reaction high crossing at 53.90.
Second resistance is March's high crossing at 54.66.

First support is last Wednesday's low crossing at 47.37.
Second support is the reaction low crossing at 47.26.

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The June S&P 500 index was steady to slightly lower due to profit taking overnight as it consolidates some of its recent gains. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are still possible near term.

If June extends the rally off March's low, February's high crossing at 867.50 is the next upside target. Closes below the 20 day moving average crossing at 824.30 are needed to confirm that a short term top has been posted.

Friday's pivot point, the line in the sand, is 856.25

First resistance is Thursday's high crossing at 867.00.
Second resistance is January's high crossing at 937.00.

First support is Wednesday's low crossing at 831.70.
Second support is the 20 day moving average crossing at 824.30.

The June S&P 500 Index was down 0.10 points. at 861.40 as of 5:58 AM CST. Overnight action sets the stage for a steady to lower opening by the June S&P 500 index when the day session begins later this morning.

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The June Dollar was higher overnight as it extends the rebound off Monday's low. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. Closes above last Thursday's high crossing at 86.24 would open the door for additional short covering gains during April.

If June renews Monday's decline, last Monday's low crossing at 84.10 is the next downside target. Closes below last Monday's low would open the door for a possible test of March's low crossing at 83.15.

First resistance is last Thursday's high crossing at 86.24.
Second resistance is the reaction high crossing at 86.61.

First support is last Monday's low crossing at 84.10.
Second support is March's low crossing at 83.14.


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Thursday, April 16, 2009

Crude Oil Closes Higher On Choppy Trading


May crude oil closed up $0.69 at $49.94 a barrel today. Prices closed near mid range today in quieter trading. Trading has turned choppy. A potentially bearish descending triangle pattern is in place on the daily bar chart. Crude oil bulls and bears are on a level near term technical playing field.

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The June U.S. dollar index closed up 10 points at 85.46 today. Prices closed near mid range today. Bulls and bears are on a level near term technical playing field. Bulls' next upside price objective is to close prices above solid technical resistance at 86.61.

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The June S&P 500 futures index closed up 13.20 at 861.70. Prices closed near the session high today and hit a fresh nine week high. The June Dow futures closed up 80 points at 8,060. Prices closed near the session high and hit a fresh nine week high today.


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Crude Rises On Jobless Claims, Petrobras Seeks Additional Rigs


"Crude Oil Rises After Unexpected Decline in U.S. Jobless Claims"
Crude oil rose after the number of U.S. workers claiming jobless benefits unexpectedly fell last week, indicating the pace of economic decline may be slowing. Oil climbed as much as 2.5 percent after the Labor Department reported that claims decreased by 53,000 to 610,000 in the week ended April 11, the fewest since January. China, the biggest oil consumer after the U.S., grew 6.1 percent during the first quarter, the slowest pace in almost 10 years....Complete Story

"Petrobras Seeks New Rigs, Marches On With Expansion Plan"
Petrobras will start seeking bids for new rigs in the next couple of months as it marches on with its ambitious five-year investment plan. The Brazilian state energy giant in January announced it planned to invest $174.4 billion in 2009-13, including $28.6 billion this year -- an increase from $23 billion in 2008, which is unusual as global oil majors including U.S. firms Chevron Corp. and ConocoPhillips are cutting back on investment....Complete Story

"Total, China In Venezuela Oil Talks"
France's Total, China National Petroleum Corp and Petroleos de Venezuela are in advanced talks about a deal to produce and refine Venezuelan oil to send to China, the Wall Street Journal reported. Senior officials from all three groups plan to meet in Caracas next month to discuss a possible multi billion dollar accord, the paper said on Wednesday, citing people close to the talks.
The 20 year venture could see 200,000 barrels of oil a day shipped to China possibly starting in 2013....Complete Story


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Crude Higher On Short Covering, Signals Turn Bearish


May crude oil was higher overnight due to short covering as it consolidates some of this week's decline. However, stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 47.26 are needed to confirm that a short term top has been posted.

Closes above March's high crossing at 54.66 are needed to confirm an upside breakout of the current consolidation pattern.

First resistance is the reaction high crossing at 53.90.
Second resistance is March's high crossing at 54.66.

First support is last Wednesday's low crossing at 47.37.
Second support is the reaction low crossing at 47.26.

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The June S&P 500 index was steady to slightly lower due to profit taking overnight as it consolidates some of its recent gains. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 819.51 are needed to confirm that a short term top has been posted.

If June extends the rally off March's low, February's high crossing at 867.50 is the next upside target.

Thursday's pivot point, our line in the sand is 844.

First resistance is Monday's high crossing at 861.30.
Second resistance is February's high crossing at 867.50.

First support is Wednesday's low crossing at 831.70.
Second support is the 20 day moving average crossing at 819.51.

The June S&P 500 Index was down 1.10 points. at 847.40 as of 6:00 AM CST. Overnight action sets the stage for a steady to lower opening by the June S&P 500 index when the day session begins later this morning.

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The June Dollar was higher overnight due to short covering as it consolidates some of Monday's decline. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

If June extends this week's decline, last Monday's low crossing at 84.10 is the next downside target. Closes below last Monday's low would open the door for a possible test of March's low crossing at 83.15. Closes above last Thursday's high crossing at 86.24 would open the door for additional short covering gains during April.

First resistance is last Thursday's high crossing at 86.24.
Second resistance is the reaction high crossing at 86.61.

First support is last Monday's low crossing at 84.10.
Second support is March's low crossing at 83.14.

Wednesday, April 15, 2009

Crude Oil Closes Near The Session Lows Again


May crude oil closed up $0.12 at $49.53 a barrel today. Prices closed nearer the session low again today. Trading has turned choppy. A bearish weekly DOE storage report did limit gains in crude and kept prices under pressure most of the day. Crude oil bulls and bears are still on a level near term technical playing field.

The U.S. stock indexes closed mixed but nearer their session highs today following more weak U.S. economic data. However, there were some minor positives in the data that gave stock traders some confidence the worst of the economic crisis is past. Stock index futures prices are still in uptrends from the March lows.

The June U.S. dollar index closed up 32 points at 85.25 today. Prices closed near mid range today. Bulls and bears are back on a level near term technical playing field. Bulls' next upside price objective is to close prices above solid technical resistance at 86.61.


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Crude Oil falls As Supplies Rise, OPEC Cuts Forcast


"Crude Oil Falls As U.S. Supplies Rise To The Highest Since 1990"
Crude oil fell after a government report showed that U.S. stockpiles climbed to the highest level in almost 19 years as demand dropped. Inventories rose 5.67 million barrels to 366.7 million last week, the highest since September 1990, the Energy Department said today....Complete Story

"Energy Stocks Experience Difficult First Quarter"
The S&P 500 Index experienced an 11.7% loss for the first quarter of 2009 while the index's Energy sector generated a slightly worse quarterly performance with a 12.1% loss. Of the S&P 500's ten industry sectors, only Technology produced a positive investor return....Complete Story

"OPEC Cuts 2009 Oil Demand Forecast As World Economy Contracts"
The Organization of Petroleum Exporting Countries cut its forecast for oil demand this year for an eighth successive month as the economic slowdown in the world’s biggest oil consumers worsens. The estimate for 2009 global demand was lowered by 430,000 barrels a day....Complete Story

Crude Oil Higher Overnight, Will Equities Bring Oil Down?


May crude oil was higher overnight due to short covering as it consolidates some of this week's decline.

However, stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near term.

Closes below the reaction low crossing at 47.26 are needed to confirm that a short term top has been posted.

Closes above March's high crossing at 54.66 are needed to confirm an upside breakout of the current consolidation pattern.

First resistance is the reaction high crossing at 53.90.
Second resistance is March's high crossing at 54.66.

First support is last Wednesday's low crossing at 47.37.
Second support is the reaction low crossing at 47.26.

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The June S&P 500 index was lower due to profit taking overnight as it consolidates some of its recent gains. Stochastics and the RSI remain overbought.

If June extends the rally off March's low, February's high crossing at 867.50 is the next upside target. Closes below the 20 day moving average crossing at 816.28 are needed to confirm that a short term top has been posted.

Wednesday's daily pivot point is 845, weekly pivot is 837.

First resistance is Monday's high crossing at 861.30.
Second resistance is February's high crossing at 867.50.

First support is the 10 day moving average crossing at 833.84.
Second support is the 20 day moving average crossing at 816.28.

The June S&P 500 Index was down 1.10 points. at 839.20 as of 6:01 AM CST. Overnight action sets the stage for a lower opening by the June S&P 500 index when the day session begins later this morning.

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The June Dollar was lower overnight and is poised to extend Monday's decline. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term.

If June extends this week's decline, last Monday's low crossing at 84.10 is the next downside target. Closes below last Monday's low would open the door for a possible test of March's low crossing at 83.15. Closes above last Thursday's high crossing at 86.24 would open the door for additional short covering gains during April.

First resistance is last Thursday's high crossing at 86.24.
Second resistance is the reaction high crossing at 86.61.

First support is last Monday's low crossing at 84.10.
Second support is March's low crossing at 83.14.

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10:30 AM ET. Apr 10..US Energy Dept Oil Inventories

.....Crude Oil Stocks (previous 361M)

.....Crude Oil Stocks (Net Change) (expected +2.1M; previous +1.6M)

.....Gasoline Stocks (previous 217.4M)

.....Gasoline Stocks (Net Change) (expected -500K; previous +656K)

.....Distillate Stocks (previous 140.7M)

.....Distillate Stocks (Net Change) (expected -700K; previous -3.3M)

.....Refinery Usage (expected 82.1%; previous 81.8%)

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Tuesday, April 14, 2009

Crude Oil Falls On Weak Retail Numbers, OPEC Thwarted By Brazil and Russia


"Crude Oil Falls After U.S. Retail Sales Unexpectedly Drop"
Crude oil fell after a report showed that retail sales in the U.S., the world’s biggest energy consuming country, unexpectedly declined in March. The oil market retreated after the Commerce Department reported that sales dropped 1.1 percent. Prices paid to U.S. producers decreased in March after two months of gains, a Labor Department report showed....Complete Story

"World Awash in Oil: Demand Lacking Says IEA"
On Friday the International Energy Agency (IEA) cut its forecast for global oil demand by one million barrels per day (b/d) to 83.4 million b/d. That means the world will be using approximately 2.4 million b/d less than in 2008, or roughly a 3% decline from a year ago. This matches the first year decline experienced during the 1979-1983 period, but the IEA does not....Complete Story

"OPEC Cuts Thwarted as Brazil, Russia Grab U.S. Market"
As OPEC nations make their biggest oil production cuts on record, Brazil, Russia and the U.S. are pumping more, threatening to send crude back below $50 a barrel as demand slows. U.S. imports from the Organization of Petroleum Exporting Countries fell 818,000 barrels a day, or 14 percent, to 5.02 million in January from a year earlier....Complete Story

"Qatar Energy Minister Says Oil Between $40-50/Barrel Realistic"
Qatar's Deputy Prime Minister and Minister of Energy and Industry Abdullah al-Attiya said on Monday that oil prices between $40 and $50 per barrel are realistic under the current global financial crisis. Speaking to reporters on the sidelines of the International Energy Forum....Complete Story

Crude Oil Higher Overnight On Short Covering


May crude oil was higher overnight due to short covering as it consolidates some of Monday's decline. Stochastics and the RSI are turning bullish hinting that sideways to higher prices are possible near term.

If May extends last Thursday's rally, March's high crossing at 54.66 then January's high crossing at 58.31 are the next upside targets. Closes below the reaction low crossing at 47.26 are needed to confirm that a short term top has been posted.

First resistance is the reaction high crossing at 53.90.
Second resistance is March's high crossing at 54.66.

First support is last Wednesday's low crossing at 47.37.
Second support is the reaction low crossing at 47.26.

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The June S&P 500 index was steady to lower due to profit taking overnight as it consolidates some of its recent gains. Stochastics and the RSI are overbought but are bullish signaling that sideways to higher prices are possible near term.

If June extends the rally off March's low, February's high crossing at 867.50 is the next upside target. Closes below the 20 day moving average crossing at 813.68 are needed to confirm that a short term top has been posted.

First resistance is Monday's high crossing at 861.30.
Second resistance is February's high crossing at 867.50.

First support is the 10 day moving average crossing at 830.56.
Second support is the 20 day moving average crossing at 813.66.

The June S&P 500 Index was down 2.10 points. at 851.90 as of 5:58 AM CST. Overnight action sets the stage for a steady to lower opening by the June S&P 500 index when the day session begins later this morning.

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The June Dollar was higher due to short covering overnight as it consolidates some of Monday's decline. Stochastics and the RSI are turning neutral hinting that a short term top might be in or is near.

If June renews last week's rally, the reaction high crossing at 86.61 is the next upside target. Closes below last Monday's low would open the door for a possible test of March's low crossing at 83.15.

First resistance is last Thursday's high crossing at 86.24.
Second resistance is the reaction high crossing at 86.61.

First support is last Monday's low crossing at 84.10.
Second support is March's low crossing at 83.14.

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4:30 PM ET. Apr 10...API Oil Industry Report

.....................Crude Stocks (Net Change) (previous +3.2M)

.....................Gasoline Stocks (Net Change) (previous -451K)

.....................Distillate Stocks (Net Change) (previous +1.7M)

.....................Refinery Runs (previous 81.8%)

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