Crude Oil Drops a Second Day on U.S. Inventory Gains, Stronger Dollar

Crude oil declined for a second day after a U.S. government report yesterday showed a bigger than forecast increase in inventories, while a stronger dollar dulled the appeal of commodities. The Energy Department reported that crude stockpiles rose by 2.32 million barrels last week, compared with an expected 400,000 barrel gain, as refineries operated at their lowest rate outside of a hurricane period since 1989. Supplies of distillate fuels such as heating oil declined less than forecast.

“Strong contraction in distillate demand, which belies the recovery in the U.S. suggested by the latest GDP and manufacturing data, is weighing on sentiment,” said Harry Tchilinguirian, head of commodity derivatives research at BNP Paribas SA in London. “It will be the second half of the year before oil breaks its range centered around $75 and sustainably rallies.” Crude oil for March delivery fell as much as 88 cents, or 1.1 percent, to $76.10 a barrel in electronic trading on the New York Mercantile Exchange. It was at $76.35 at 1:21 a.m. London time. Futures, which gained 78 percent in 2009, are down 3 percent so far this year.

Crude declined in tandem with European stock indexes. The Dow Jones Stoxx 600 Index slipped 0.9 percent to 247.21 as of 1:22 p.m. in London, erasing an earlier gain of 0.3 percent, led by losses among companies in Greece, Portugal and Spain.....Read the entire article.

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Crude Oil Pivot, Support and Resistance Numbers For Thursday Morning

Crude oil was lower overnight as it consolidates some of the rally off last week's low. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If March extends this week's rally, the 50% retracement level of January's decline crossing at 78.43 is the next upside targets. Closes below the 10 day moving average crossing at 74.96 would temper the near term friendly outlook.

Thursday's pivot point, our line in the sand is 77.18

First resistance is Wednesday's high crossing at 78.04
Second resistance is the 50% retracement level of January's decline crossing at 78.43

First support is the 10 day moving average crossing at 74.96
Second support is last Friday's low crossing at 72.43

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Natural gas was lower overnight as it consolidates some of the rebound off last week's low. Stochastics and the RSI remain bullish signaling that additional strength is possible near term.

Closes above the 20 day moving average crossing at 5.500 are needed to confirm that a short term low has been posted. If March renews the decline off January's high, the 75% retracement level of the December-January rally crossing at 4.919 is the next downside target.

Natural gas pivot point for Thursday is 5.446

First resistance is the 20 day moving average crossing at 5.500
Second resistance is Wednesday's high crossing at 5.558

First support is last Thursday's low crossing at 5.060
Second support is the 75% retracement level of the December-January rally crossing at 4.919

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The U.S. Dollar was higher overnight and is trading above the 38% retracement level of the 2009 decline crossing at 79.71. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are possible near term.

If March extends this winter's rally, the 50% retracement level of the 2009 decline crossing at 81.32 is the next upside target. Closes below the 20 day moving average crossing at 78.31 would confirm that a short term top has been posted.

First resistance is the overnight high crossing at 79.89
Second resistance is the 50% retracement level of the 2009 decline crossing at 81.32

First support is the 10 day moving average crossing at 79.09
Second support is the 20 day moving average crossing at 78.31

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Bulls Lose Some Momentum on Unexpected Oil Inventory Build

Crude oil closed lower on Wednesday as it consolidated some of this week's rally. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI have turned bullish signal that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 77.95 are needed to confirm that a short term low has been posted. If March renews the decline off January's high, the 75% retracement level of the September-January rally crossing at 71.70 is the next downside target. First resistance is the 20 day moving average crossing at 77.95. Second resistance is the 50% retracement level of January's decline crossing at 78.43. First support is the 10 day moving average crossing at 74.94. Second support is last Friday's low crossing at 72.43.

Natural gas closed lower on Wednesday as it consolidated some of this week's rally. The mid range close sets the stage for a steady opening on Thursday. 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 5.527 are needed to confirm that a low has been posted. If March renews the decline off January's high, the 75% retracement level of the December-January rally crossing at 4.919 is the next downside target. First resistance is the 20 day moving average crossing at 5.527. Second resistance is the reaction high crossing at 5.804. First support is last Thursday's low crossing at 5.060. Second support is the 75% retracement level of the December-January rally crossing at 4.919.

The U.S. Dollar closed higher on Wednesday ending a two day correction off Monday's high. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways prices are possible near term. If March extends this winter's rally, the 50% retracement level of the 2009-2010 decline crossing at 81.32 is the next upside target. Closes below the 20 day moving average crossing at 78.22 would confirm that a short term top has been posted. First resistance is Monday's high crossing at 79.76. Second resistance is the 50% retracement level of the 2009-2010 decline crossing at 81.32. First support is the 10 day moving average crossing at 78.97. Second support is the 20 day moving average crossing at 78.22.

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Crude Oil Falls After Report Shows Bigger Than Forecast U.S. Supply Gain

Crude oil fell after an Energy Department report showed a bigger than forecast increase in stockpiles as refineries idled units and imports climbed. Supplies rose 2.32 million barrels to 329 million last week, the report showed. A 400,000 barrel gain was forecast, according to the median of 16 analyst responses in a Bloomberg news survey. Refineries operated at the lowest rate in more than a year as fuel demand lagged behind year earlier levels.

“The crude number was surprisingly large,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas based energy consultant. Crude oil for March delivery fell 24 cents, or 0.3 percent, to $76.99 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Prices jumped as much as 81 cents and slipped 71 cents during the session. Oil traded at $77.17 a barrel before the release of the inventory report at 10:30 a.m. in Washington.

Gasoline inventories unexpectedly dropped 1.31 million barrels to 329 million, the report showed. Supplies were 2.3 percent higher than the five year average for the period, according to the department. Stockpiles were forecast to climb by 1.4 million barrels. “The fact that gasoline inventories were down in an environment where demand is so paltry shows that refiners are serious about reducing fuel stockpiles,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses on food and energy commodities.....Read the entire article.

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Phil Flynn: You Have Got to Love that Groundhog

The Energy Report Wednesday February 3 2010

Maybe that ground hog is something special after all. Oil futures fly after the ground hog say his shadow and predicted 6 more weeks of winter. And by the way no I did not see my shadow and yes I heard that one before. Still oil joined the stock market in the biggest two day rebound in over three months. Oils sudden resurgence comes on the backs of some renewed economic optimism especially in the manufacturing sector but also because of some concerns about the disruption of supply.

RBOB Gasoline lead the rally gaining even more support from refineries that are closing on purpose and some that are not. Oh sure most of the move in oil seemed to be macro economically motivated but word that Valero Energy Corp. shut a fluid catalytic cracker at its Quebec City refinery after a fire sure helped gasoline lead the way. Bloomberg news said that the fire was reported at about 2 a.m. local time at pumps on the gasoline making cat cracker, Bill Day, a company spokesman, said in an e-mail. No injuries were reported. The blaze was extinguished at 4:40 a.m.

The 66,000 barrel a day cat cracker has been shut down and an estimate for the restart of the unit is pending a damage assessment, according to Day. The refinery has a capacity of 265,000 barrels a day, according to data compiled by Bloomberg.....Read the entire article.


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Crude Oil: Verge of Collapse?

Stephen Schork, editor of The Schork Report, and Bruce Lanni, of Nollenberger Capital Partners, share their energy outlooks.




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Crude Oil Moves Higher, Signals Turn Bullish

Crude oil was higher overnight as it extends the rally off last week's low. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. Tuesday's close above the 10 day moving average crossing at 75.01 confirms that a short term low has been posted.

If March extends this week's rally, the 20 day moving average crossing at 77.90 then the 50% retracement level of January's decline crossing at 78.43 are the next upside targets.

Wednesday's pivot point for crude oil is 76.35

First resistance is the 20 day moving average crossing at 77.90
Second resistance is the overnight high crossing at 78.04

First support is the 10 day moving average crossing at 75.01
Second support is last Friday's low crossing at 72.43

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Natural gas was higher due to short covering overnight as it extends the rebound off last week's low crossing at 5.060. Stochastics and the RSI are oversold and are turning bullish signaling that additional short covering gains are possible near term.

Closes above the 20 day moving average crossing at 5.533 are needed to confirm that a short term low has been posted. If March renews the decline off January's high, the 75% retracement level of the December-January rally crossing at 4.919 is the next downside target.

Natural gas pivot point for Wednesday is 5.457

First resistance is the 20 day moving average crossing at 5.533
Second resistance is overnight high crossing at 5.537

First support is last Thursday's low crossing at 5.060
Second support is the 75% retracement level of the December-January rally crossing at 4.919

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The U.S. Dollar was lower due to profit taking overnight as it consolidates below resistance marked by the 38% retracement level of the 2009 decline crossing at 79.71. Stochastics and the RSI are overbought and are turning bearish signaling that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 78.19 would confirm that a short term top has been posted. If March extends this winter's rally, the 50% retracement level of the 2009 decline crossing at 81.32 is the next upside target.

First resistance is Monday's high crossing at 79.76.
Second resistance is the 50% retracement level of the 2009 decline crossing at 81.32

First support is the 10 day moving average crossing at 78.91
Second support is the 20 day moving average crossing at 78.19

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Crude Oil Daily Technical Outlook Wednesday Morning

Crude oil's rebound from 72.43 extends further to as high as 78.04 so far today an breaks mentioned first target of 38.2% retracement of 83.95 to 72.43 at 76.83. At this point, intraday bias remains on the upside as long as 75.44 minor support holds and further rally could be seen towards 61.8% retracement at 79.55 next. On the downside, though below 75.44 will suggest that rebound from 72.43 has completed and will flip intraday bias back to the downside.

In the bigger picture, crude oil managed to hold above medium term trend line support and rebounded strongly from 72.43. The development argues that medium term rise from 33.2 might not be over yet even though upside momentum is clearly diminishing. Another high above 83.95 might still be seen. Nevertheless, as rise from 33.2 is treated as a correction to down trend from 147.27, we'd continue to look of reversal signal as crude oil approaches 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. On the downside, break of 72.43 will now be an important signal that crude oil has topped out and will turn focus to 68.59 support for confirmation.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Your Closing Numbers.....Oil, Natural Gas, Heating Oil and Gasoline

Crude oil closed up $2.88 at $77.31 a barrel today. Prices closed near the session high today and hit a fresh two week high on more short covering and fresh speculative buying interest following recent bullish U.S. economic data and cold weather gripping much of the U.S. A steep three week old downtrend on the daily bar chart was negated today. Bulls gained fresh upside near term technical momentum today as it now looks like a big double bottom reversal pattern has formed on the daily bar chart.

Heating oil closed up 804 points at $2.0353 today. Prices closed near the session high again today on more short covering and fresh speculative buying. The bulls' next upside price objective is closing prices above solid technical resistance at $2.1500.

Unleaded gasoline (RBOB) closed up 888 points at $2.0209 today. Prices closed near the session high on short covering and fresh speculative buying. A steep three week old downtrend on the daily bar chart was negated today.

Natural gas closed up 3.1 cents at $5.464 today. Prices closed near mid range today and were supported on more short covering in a bear market and some cold weather in the U.S. forecast. Bears still have the overall near term technical advantage. The next upside price objective for the bulls is closing prices above solid technical resistance at $5.80.

The U.S. dollar index closed down 24 points at 79.18 today. Prices closed near the session low on more profit taking. No chart damage has occurred. Bulls still have some upside near term technical momentum.

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Where is Crude Oil Headed Wednesday?

CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed tomorrow.




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New Video: Crude Oil…What Does the Chart Say?

It appears as though crude oil has an amazing cyclic quality that can be timed quite accurately with MarketClub’s “Triangle” technology. In this new short video, I showcase this cycle and how you can take advantage of it.

Just click here to watch the new video and as always our videos are free to watch and there are no registration requirements. All we ask for is that you comment on this video if you find it interesting and informative.

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Crude Oil....What Does the Chart Say?

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Is a Short Term Low In For Crude Oil? Here's the Numbers

Crude oil was higher overnight due to short covering as it consolidates some of last week's decline. Stochastics and the RSI are oversold and are turning bullish hinting that a short term low might be in or is near.

Closes above the 10 day moving average crossing at 74.82 would confirm that a short term low has been posted. If March extends this year's decline, the 75% retracement level of the September-January rally crossing at 71.70 is the next downside target.

Crude oil's pivot point for Tuesday, our line in the sand is 73.95

First resistance is the overnight high crossing at 75.44
Second resistance is the 20 day moving average crossing at 78.13

First support is last Friday's low crossing at 72.43
Second support is the 75% retracement level of the September-January rally crossing at 71.70

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Natural gas was higher due to short covering overnight as it extends the rebound off last week's low crossing at 5.060. Stochastics and the RSI are oversold and are turning bullish signaling that additional short covering gains are possible near term.

Closes above the 20 day moving average crossing at 5.535 are needed to confirm that a short term low has been posted. If March extends the decline off January's high, the 75% retracement level of the December-January rally crossing at 4.919 is the next downside target.

Tuesday's pivot point for natural gas is 5.373

First resistance is overnight high crossing at 5.491
Second resistance is the 20 day moving average crossing at 5.535

First support is last Thursday's low crossing at 5.060
Second support is the 75% retracement level of the December-January rally crossing at 4.919

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The U.S. Dollar was lower due to profit taking overnight as it consolidates below resistance marked by the 38% retracement level of the 2009 decline crossing at 79.71. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If March extends this winter's rally, the 50% retracement level of the 2009 decline crossing at 81.32 is the next upside target. Closes below the 20 day moving average crossing at 78.13 would confirm that a short term top has been posted.

First resistance is Monday's high crossing at 79.76
Second resistance is the 50% retracement level of the 2009 decline crossing at 81.32

First support is the 10 day moving average crossing at 78.88
Second support is the 20 day moving average crossing at 78.13

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Crude Oil Daily Technical Outlook For Tuesday

Break of 75.04 resistance argues that a short term bottom is formed at 72.43 on bullish convergence condition in 4 hours MACD. Intraday bias is flipped back to the upside and stronger rebound should be seen towards 38.2% retracement of 83.95 to 72.43 at 76.83 first. On the downside, though, a break below 72.43 will indicate that fall from 83.95 has resumed for 68.59 key support.

In the bigger picture, the case of medium term reversal continued to build up with fall from 83.95 extended. As noted before, whole medium term rise from 33.2 is viewed as a correction to fall from 147.27 only. Break of trend line support (now at 71/72) level will be the first signal that such rise has completed. Further break of 68.59 will support will confirm this bearish case and will target a retest on 33.2 low as correction down trend from 147.27 resumes. On the upside, though, in case of another rise, crude oil we'd continue to look of reversal signal as crude oil approaches 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Crude Oil Rises for a Second Day on Increase in U.S. Manufacturing

Crude oil rose for a second day in New York after manufacturing in the U.S. increased at the fastest pace since August 2004, signaling that fuel use in the world’s biggest energy consuming country may gain.

Oil advanced the most in four weeks yesterday after the Institute for Supply Management’s factory index climbed to a higher than anticipated 58.4 in January, from December’s 54.9. European manufacturing also increased as companies raised output to meet reviving global demand, a separate report showed. Energy Department data tomorrow may show a drop in U.S. distillate fuel inventories.

“We can see that manufacturing is improving,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “We now want to see that number backed up with good fundamentals in the inventory data.”

Crude oil for March delivery gained as much as $1.01, or 1.4 percent, to $75.44 a barrel in electronic trading on the New York Mercantile Exchange. It was at $74.83 at 11:59 a.m. Singapore time. Yesterday, the contract rose 2.1 percent to settle at $74.43, the biggest one day increase since Jan. 4.

The U.S. manufacturing figure exceeded the median forecast of 55.5 from 67 economists surveyed by Bloomberg News. Readings higher than 50 signal an expansion. Manufacturing accounts for about 12 percent of the economy.

European companies raised production in January as a global economic recovery spurred exports. An index of manufacturing in the 16 nation euro region climbed to 52.4 from 51.6 in December, London based Markit Economics said yesterday. Asian shares climbed, driving the MSCI Asia Pacific Index up the most in more than two weeks.....Read the entire article.

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New Video: Oil May Have Seen Short Term Bottom

Crude prices may have seen a short term bottom and keep an eye on indium as the metal has potential for sky high prices, says John Licata, chief investment strategist at Blue Phoenix. He speaks to Bill Evans of Westpac, Kumar Palghat of Kapstream Capital and CNBC's Karen Tso.




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Crude Oil High Range Close Brings Out The Over Confident Bulls

Crude oil closed higher due to short covering on Monday as it consolidated some of the decline off January's high. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are oversold but remain neutral to bearish signal that sideways to lower prices are possible near term.

If March extends the decline off January's high, the 75% retracement level of the September-January rally crossing at 71.70 is the next downside target. Closes above the 20 day moving average crossing at 78.47 are needed to confirm that a short term low has been posted.

Crude oil Pivot point for Monday evening is 74.16

First resistance is the 10 day moving average crossing at 75.23
Second resistance is the 20 day moving average crossing at 78.47

First support is last Friday's low crossing at 72.43
Second support is the 75% retracement level of the September-January rally crossing at 71.70

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Natural gas closed higher on Monday as it rebounds off the 62% retracement level of the December-January rally crossing at 5.114. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are oversold and are turning neutral to bullish hinting that a low might be in or is near.

Closes above the 20 day moving average crossing at 5.555 are needed to confirm that a low has been posted. If March extends the decline off January's high, the 75% retracement level of the December-January rally crossing at 4.919 is the next downside target.

Natural gas pivot point for Monday evening is 5.377

First resistance is the 10 day moving average crossing at 5.434
Second resistance is the 20 day moving average crossing at 5.555

First support is last Thursday's low crossing at 5.060
Second support is the 75% retracement level of the December-January rally crossing at 4.919

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The U.S. Dollar closed lower due to profit taking on Monday after testing resistance marked by the 38% retracement level of the 2009-2010 decline crossing at 79.71. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways prices are possible near term.

If March extends this winter's rally, the 50% retracement level of the 2009-2010 decline crossing at 81.32 is the next upside target. Closes below the 20 day moving average crossing at 78.06 would confirm that a short-term top has been posted.

First resistance is today's high crossing at 79.76
Second resistance is the 50% retracement level of the 2009-2010 decline crossing at 81.32

First support is the 10 day moving average crossing at 78.71
Second support is the 20 day moving average crossing at 78.06

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New Video: Hot Stocks in The Energy Sector

Stocks in the sector kick off the month with gains, based on higher oil prices and bullish economic data, as well as on Exxon Mobil's earnings. A joint venture in ethanol also is drawing attention. Steve Gelsi reports.



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Crude Rises After Dollar Weakens, Report Shows Gain in Consumer Spending

Crude oil rose after the dollar dropped against the euro and U.S. manufacturing increased at the fastest pace since August 2004, signaling that fuel use in the world’s biggest energy consuming country will gain.

Oil climbed as much as 1.8 percent as the weak dollar bolstered the appeal of commodities. The Institute for Supply Management’s factory index advanced to 58.4, higher than anticipated, from December’s 54.9, figures from the Tempe, Arizona-based group showed. A separate report showed that European manufacturing gained last month.

“The first factor at work is the weaker dollar,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “The ISM number was very strong. The strength isn’t just here, European manufacturing is also expanding.”

Crude oil for March delivery rose 95 cents, or 1.3 percent, to $73.84 a barrel at 11:31 a.m. on the New York Mercantile Exchange. Futures fell to $72.89 on Jan. 29, the lowest settlement since Dec. 21.

The greenback slipped 0.4 percent versus the euro to $1.3911, from $1.3863 on Jan. 29.

The U.S. manufacturing figure exceeded economists’ median forecast of 55.5, according to 67 projections in a Bloomberg News survey. Readings higher than 50 signal an expansion. Manufacturing accounts for about 12 percent of the economy.

European manufacturing also accelerated more than estimated in January. An index of manufacturing in the 16-nation euro region increased to 52.4 from 51.6 in December, London-based Markit Economics said today.....Read the entire article.

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Traders Ditching Oil Hoarded At Sea As Market Tightens

The amount of oil held in tankers at sea has halved from its April 2009 peak of 90 million barrels according to ship broker ICAP. Given that much of this oil was held in order to arbitrage current vs. future oil prices, a reduction in floating storage implies a tightening of the oil market.

WSJ: ICAP said there were currently 21 trading VLCCs offshore with some 43 million barrels of crude. Seven of these are expected to discharge in February and one more in March. So far, it appeared those discharged cargoes wouldn't be replaced by new ones.

"I haven't seen any fixtures for VLCC storage in the last two weeks," said Simon Newman, ICAP's senior tanker analyst. "That would imply that storage looks set to fall in the short term."

Assuming there are no new fixtures, the amount of crude in storage could sink to 27 million barrels by March, the lowest level since the current contango play began in late 2008.

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Weaker Dollar Pushes Crude Oil Higher, Bears Still have The Advantage

Crude oil was higher overnight due to short covering as it consolidates some of last week's decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.

If March extends this year's decline, the 75% retracement level of the September-January rally crossing at 71.70 is the next downside target. Closes above the 10 day moving average crossing at 75.10 are needed to confirm that a short term low has been posted.

Crude oil pivot point for Monday, our line in the sand is 73.38

First resistance is the 10 day moving average crossing at 75.10
Second resistance is the 20 day moving average crossing at 78.41

First support is last Friday's low crossing at 72.43
Second support is the 75% retracement level of the September-January rally crossing at 71.70

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Natural gas was higher due to short covering overnight as it consolidates some of last week's decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.

If March extends last week's decline, the 75% retracement level of the December-January rally crossing at 4.919 is the next downside target. Closes above the 20 day moving average crossing at 5.547 would confirm that a short term low has been posted.

Monday's pivot point for natural gas is 5.170

First resistance is broken trading range support crossing at 5.327
Second resistance is the 10 day moving average crossing at 5.417

First support is last Thursday's low crossing at 5.060
Second support is the 75% retracement level of the December-January rally crossing at 4.919

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The U.S. Dollar was slightly lower due to light profit taking overnight after testing resistance marked by the 38% retracement level of the 2009 decline crossing at 79.71. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If March extends this winter's rally, the 50% retracement level of the 2009 decline crossing at 81.32 is the next upside target. Closes below the 20 day moving average crossing at 78.07 would confirm that a short term top has been posted.

First resistance is the overnight high crossing at 79.76
Second resistance is the 50% retracement level of the 2009 decline crossing at 81.32

First support is the 10 day moving average crossing at 78.73
Second support is the 20 day moving average crossing at 78.07

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