Thursday, January 13, 2011

Washington's Goal For Crude Oil Prices.......Everybody Sing "Can You Take Me Higher"

Preparing for our post this morning and another great day of trading I again was struck by the stark contrast in energy policies coming out of Washington and the policies....or should I say PROFITS coming out of CNPC. PetroChina's parent company.

Bloomberg News reported this morning....China National Petroleum Corp., the parent of the country’s biggest oil and gas producer, increased its profit by 30 percent last year as oil prices rose. The majority shareholder in Hong Kong listed PetroChina Co. earned 167.6 billion yuan ($25.4 billion), President Jiang Jiemin said in a statement on CNPC’s website today, without specifying whether the income was before or after tax. Profit reached 128.6 billion yuan in 2009, its annual report shows.

CNPC benefited from the 15 percent jump in oil prices last year and higher output from fields outside China. The Beijing based company, which holds assets and interests in 30 countries, said overall crude output may rise by an average of 2 million metric tons annually during the next five years, and CNPC is targeting a “rapid” increase in gas production.

“The estimated increases make sense,” Yin Xiaodong, chief oil analyst at Beijing based Citic Securities Co., said by telephone. “Gas production growth will definitely outpace increases in oil, and overseas acquisitions will give CNPC a strong boost in the long term.” CNPC’s oil and gas production in countries including Kazakhstan rose 14 percent last year. PetroChina said this week its venture with BP Plc met their 2010 output target for the Rumaila oilfield in southern Iraq.

All of this while oil prices soared after the release of the final scathing report by the White House oil spill commission. Co-Chairman William Reilly alluded to in a press conference that if you thought that the panel investigating the Deep Water Horizon disaster would fade away, well you have another think coming. Mr. Reilly says that he plans to make a “lot of noise”! This of course will send major oil companies scurrying to find oil in far away places that China has been doing business with for years now.

The energy policy coming out of Washington is simple. Make oil as expensive as possible making current food supply issues worldwide and for Americans an even larger burden. And keep the U.S. as reliant as possible on foreign oil and energy. And China just keeps expanding it's oil exploration at alarming rates, and good for them. I found this great website that we all might find very useful. Learn to Speak Chinese, if we are going to need to beg for food we better be using the right language. And yes, our fund has taken larger positions in both etf's MOO and DBA. Our favorite way to play food.

Let's try to make some money today so maybe we can afford that food and here is the numbers we are using........

Crude oil was lower due to profit taking overnight as it consolidates some of this week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If February extends this week's rally, this year's high crossing at 92.58 is the next upside target. Closes below last Friday's low crossing at 87.25 would confirm that a short term top has been posted. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is last Friday's low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Thursday morning is 91.68.

Natural gas was lower overnight hinting that the two day correction off Monday's low might be ending. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. Closes below the 20 day moving average crossing at 4.343 are needed to confirm that a short term top has been posted. First resistance is last Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.343. Second support is December's low crossing at 3.985. Natural gas pivot point for Thursday morning is 4.510.

Gold was lower overnight as it consolidates some of this week's rally. However, stochastics and the RSI have turned bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 1388.10 are needed to confirm that a short term low has been posted. If February renews last week's decline, the reaction low crossing at 1331.10 is the next downside target. First resistance is the 20 day moving average crossing at 1388.10. Second resistance is last Monday's high crossing at 1424.40. First support is last Friday's low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Thursday morning is 1383.70.

Don't miss our latest video "3 Smart Indicators To Trade Crude Oil With Synergism"

Share

No comments:

ShareThis