Crude Oil Weekly Technical Outlook For Saturday September 4th

From the staff at Oil N Gold.....

Crude oil was bounded in choppy sideway trading between 70.76/75.58 last week. Consolidations from 70.76 could still extend further and stronger recovery cannot be ruled out. But still, upside is expected to be limited by 61.8% retracement of 82.97 to 70.76 at 78.31 and bring resumption of fall fro 82.97. Sustained trading below 70.76/71.09 support zone will confirm our bearish view that whole rebound from 64.23 is finished at 82.97 already and target another low below 64.23.

In the bigger picture, choppy rebound from 64.23 is treated as a correction to fall from 87.15 only and has possibly finished at 82.97 already. Decisive break of 71.09 will confirm this bearish case and also indicate that whole fall from 87.15 is resuming for 60 psychological level, (50% retracement of 33.2 to 87.15 at 60.18, 100% projection of 87.15 to 64.23 from 82.97 at 60.05). Decisive break there will indicate that fall from 87.15 is developing into a powerful impulsive wave and would target 33.2 low. On the upside, break of 82.97 resistance is needed to invalidate this view. Otherwise, we'll stay bearish in crude oil.

In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Our view is that fall from 87.15 would develop into the third falling leg of the whole correction from 147.27 and hence, we'd anticipate an eventual break of 33.2 low in the long term as such correction extends.

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Where is Crude Oil and Gold Headed Next Week?

CNBC's Brian Shactman discusses the day's activity in the commodities markets and looks ahead to where oil and gas are likely headed next week.




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Crude Oil Trader Market Summary For Friday Evening

The S&P 500 index gapped up and closed higher on Friday as it extended this week's rally. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI remain bullish signaling that additional gains are possible near term. If September extends this week's rally, August's high crossing at 1127.50 is the next upside target. Closes below the 10 day moving average crossing at 1059.54 would confirm that a short term top has been posted. First resistance is today's high crossing at 1104.30. Second resistance is August's high crossing at 1127.50. First support is the 20 day moving average crossing at 1071.32. Second support is the 10 day moving average crossing at 1059.54.

Crude oil closed lower on Friday due to profit taking but remains above the 10 day moving average crossing at 73.56. The mid range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 75.24 are needed to confirm that a short term low has been posted. If October renews the decline off August's high, May's low crossing at 70.35 is the next downside target. First resistance is the 20 day moving average crossing at 75.24. Second resistance is last Friday's high crossing at 75.21. First support is last Wednesday's low crossing at 70.76. Second support is May's low crossing at 70.35.

The U.S.Dollar closed lower on Friday as it extends yesterday's breakout below the 20 day moving average crossing at 82.61. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If September extends this week's decline, the reaction low crossing at 81.99 is the next downside target. If September renews August's rally, the reaction high crossing at 84.73 is the next upside target. First resistance is the 10 day moving average crossing at 82.94. Second resistance is last Tuesday's high crossing at 83.64. First support is today's low crossing at 82.05. Second support is the reaction low crossing at 81.99.

Natural gas closed higher on Friday and above the 10 day moving average crossing at 3.864 signaling that a short term low might be in or is near. 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 short covering rebound is possible near term. Closes above the 20 day moving average crossing at 4.071 would confirm that a short term low has been posted. If October extends this year's decline, weekly support crossing at 3.225 is the next downside target. First resistance is today's high crossing at 3.946. Second resistance is the 20 day moving average crossing at 4.071. First support is last Friday's low crossing at 3.697. Second support is weekly support crossing at 3.225.

Gold closed lower due to profit taking on Friday as it consolidates below the 87% retracement level of the June-July decline crossing at 1253.30. Stochastics and the RSI are overbought, diverging but are neutral to bullish signaling that sideways to higher prices are possible near term. If August extends the rally off July's low, June's high crossing at 1267.10 is the next upside target. Closes below the 20 day moving average crossing at 1228.80 are needed to confirm that a short term top has been posted. First resistance is Wednesday's high crossing at 1255.30. Second resistance is June's high crossing at 1267.10. First support is the 10 day moving average crossing at 1240.60. Second support is the 20 day moving average crossing at 1228.80.

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Phil Flynn: Welcome To September!

Forget all of that economic doom and gloom because that was so August! September has come and hope is rising. Maybe, just maybe, things were not as bad as it seemed and maybe having total petroleum supplies at all time highs really does not matter. You see in a world where the Fed always has your back it might be wise to not get to pessimistic. Remember the Fed has the printing press and they have promised to use it if needed. Of course oil had other scares to worry about.

An explosion and fire on a Mariner Energy platform had traders saying oh no here we go again. Mainer Energy, a former unit of Enron and now in the process of being bought by Apache, has had it shares of accidents racking up more than 12 in the last four years. Anytime you are dealing with oil and gas it is a potential dangerous situation and accidents are going to happen. The fears that this accident would give the critics of off shore drilling more ammunition to keep.....Read the entire article.

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5 Reasons Natural Gas Is Poised for Upside

From Bill Powers and Keith Schaefer....

This last week before Labor Day marked the 2009 low for natural gas prices. Both the natural gas price and natural gas stocks had a big run through to January 2010, creating great wealth for investors. Could that happen again this year? How real is the seasonal trade in natural gas? And how does the natural gas market compare this year over last?

This chart, published by www.rigzone.com (they have one of the best daily free e-letters in the industry) shows how well the big seasonal trade worked last year, and how it has fared for the last 10 years.
Looking at this year, 2010, we have on the positive side:
Storage is Trending Lower:
The EIA reported that for the week ended August 27, 2010 working gas in storage was 3,106 billion cubic feet (bcf), only 54 bcf larger than the prior week. U.S. storage is now 208 bcf less than last year at this time and 169 bcf above the 5-year average.
More importantly, storage injections have been below the 5-year average for 11 consecutive weeks and this trend is set to continue. Gas storage could end the refill season on November 1st at approximately 3,500 bcf. This level of storage heading into the winter heating season supports substantially higher natural gas prices.
2. Demand Continues to Strengthen:
According to the EIA demand for the first 6 months of 2010 was approximately 4.3% greater than the first 6 months of 2009.
Given the strong prices for coal this year, many utilities have stepped up their purchases of gas to run their usage of their natural gas fired power plant fleet.
Additionally, despite the weak economy in the U.S., industrial demand for natural gas has is higher this year compared to 2009.
Also, as we head into the winter heating season, demand for natural gas always picks up and should we have another cold winter storage could be drawn down very quickly.

3. Oil/Gas Ratio is Bullish:
While oil and gas on an energy equivalent basis should trade at a 6:1, the two commodities currently trade at approximately 19:1. Many natural gas focused exploration and production companies have turned their attention away from natural gas and towards oil. Chesapeake Energy (NYSE:CHK), the most active driller of shale gas wells in the U.S., has dramatically reduced its natural drilling in favor of a dozen new oil focused projects. Other companies have pursued similar paths.

4. Production Starting to Roll Over:
Monthly U.S. natural gas production which showed production fell 1.2% from May 2010 to June 2010, Due to falling production in the Gulf of Mexico, which accounts for nearly 11% of U.S. production, and several big producing states like Texas, Wyoming and New Mexico, overall U.S. production is headed downward for at least the next two years. Production growth from shale plays can no longer offset declines from the Gulf of Mexico and conventional areas.

5. Pressure Pumping Chokepoint: Due to increased demand for fracture stimulation services from the nearly dozen unconventional oil and gas plays currently under development in the U.S. and Canada, many operators are now having to wait weeks and even months for fracturing services. Once gas prices pick up and operators step up the pace of natural gas directed drilling, limited availability of fracture stimulation services will keep U.S. gas production from reversing its recently begun downtrend.

6. The forward curve for natural gas prices is much lower this year, which is to say the futures price for gas in 2011-2014 are lower than they were last year, this is bullish because it means producers can’t hedge big profits. It has also helped create the huge negative sentiment around natural gas prices, which we believe to be bullish.

On the negative side:
1. Producers are still being forced to drill to keep/earn land leases

2. Which is causing a continuing high rig count

3. And to pay for all this in the face of low cash flow, several large natural gas producers have formed joint ventures with big international companies, oftentimes National Oil Companies (NOC). This is BIG free money for these cash starved producers, and gives them the ability to keep drilling in the face of low prices.

4. Producers are now choking back production on prolific horizontal wells, reducing the steep (and highly publicized) decline rate of production in shale gas plays

5. Increased LNG capacity in both eastern Canada and the eastern US (though Liquid Natural Gas has been a non-factor in the North American market this year, and supply has been soaked up by Japan, Taiwan and China).

6. ETF (UNG-NYSE) buying continues to support prices. If low prices are the cure for low prices, investor buying in natural gas ETFs doesn’t help.

One of the last points for investors to consider, and this is neither bullish nor bearish, is that large commodity producers should not be relied upon as great gurus of their own pricing. In the last decade, some of the largest uranium, copper and gold producers, were caught completely by surprise when their commodity price spiked upwards, and were saddled with highly unprofitable hedges for years, at great cost to their shareholders.

The market will tell us within 60 days or less if the large seasonal run in natural gas prices will happen this year. We will be watching very closely.

With the fundamentals for natural gas greatly improved over the last couple of months and investment sentiment towards the commodity and gas weighted equities very negative, contrarian investors may consider getting positioned for a sharp rebound in gas prices.


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Crude Oil Daily Technical Outlook For Friday Morning

Crude oil was lower overnight as it consolidates some of Thursday's rally. 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 75.26 are needed to confirm that a short term low has been posted. If October renews the decline off August's high, May's low crossing at 70.35 is the next downside target.

First resistance is the 20 day moving average crossing at 75.26
Second resistance is Monday's high crossing at 75.58

Crude oil pivot point for Friday morning is 74.42

First support is last Wednesday's low crossing at 70.76
Second support is May's low crossing at 70.35


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Crude Oil Heads for Weekly Decline on Forecast for U.S. Jobless Increase

Crude oil declined, headed for a weekly drop, amid forecasts that a U.S. government report will probably show the jobless rate rose in August for the first time in four months, signaling a recovery in fuel demand may falter. Futures gave up some of yesterday’s 1.5 percent gain as analysts estimated the August payrolls report from the Labor Department may show the U.S. economy lost 105,000 jobs, according to a Bloomberg survey. Crude gained yesterday after an explosion on a Gulf of Mexico oil and gas platform prompted speculation that tighter regulations will cut production.

“Trading is volatile,” said Peter McGuire, managing director at CWA Global Markets Pty in Sydney. “People are still sitting on the sidelines waiting for the unemployment numbers.” The October contract fell as much as 48 cents, or 0.6 percent, to $74.54 a barrel in electronic trading on the New York Mercantile Exchange, and was at $74.69 at 2:53 p.m. Singapore time. Yesterday, it gained $1.11 to $75.02. Futures are 0.6 percent lower this week and down 5.9 percent this year.

“The market will turn to payroll numbers tonight with expectations of a headline fall of 105,000 and a rise in the unemployment rate to 9.6 percent,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in an emailed note today.....Read the entire article.

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Today's Trends: Crude Imports Decline, But Critical to U.S.

U.S crude oil imports grew rapidly from mid-20th century until the late 1970s, but fell sharply from 1979 to 1985, according to the U.S. Energy Information Administration (EIA) Annual Energy Review 2009. The trend resumed upward from 1985 through 2004, then remained flat through 2007 before dropping in 2008 and 2009.

In 2009, crude oil imports were 9.1 million b/d; petroleum product imports were 2.7 million b/d; and exports were 2.0 million b/d mainly the form of distillate and residual fuel oils.

U.S. petroleum imports rose sharply in the 1970s, and reliance on petroleum from the Organization of Petroleum Exporting Countries (OPEC) grew. In 2009, 41 percent of U.S. petroleum imports came from OPEC countries, down from 70 percent in 1977. After 1992, more petroleum came into the U.S. from non-OPEC countries than from OPEC countries.

Saudi Arabia, Venezuela, and Nigeria were the three key suppliers among OPEC countries of petroleum to the U.S. market. The amount of petroleum each country has sold to the U.S. has widely fluctuated over the decades. In 2009, Iraq supplied .4 million b/d of petroleum to the U.S., EIA reported.

Canada and Mexico were the largest non-OPEC suppliers of petroleum to the U.S. In 2009, U.S. imports from Canada reached a new high of 2.5 million b/d. Imports from Mexico were insignificant until the mid-1970s, when they began to play a key role in U.S. supplies. Canadian and Mexican petroleum together accounted for 32 percent of all U.S. imports in 2009.

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Brian Shactman: Where is Crude Oil and Gold Headed on Friday

CNBC's Brian Shactman discusses the day's activity in the commodities markets and looks at where oil and gold are likely headed tomorrow.




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Crude Oil Trader Market Summary For Wednesday Evening

The S&P 500 index closed higher on Thursday as it extended yesterday's breakout above the 20 day moving average. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are bullish signaling that additional gains are possible near term. If September extends this week's rally, the reaction high crossing at 1098.40 is the next upside target. Closes below Tuesday's low crossing at 1037.50 would confirm that a short term top has been posted. First resistance is today's high crossing at 1086.70. Second resistance is the reaction high crossing at 1098.50. First support is the 10 day moving average crossing at 1060.89. Second support is Tuesday's low crossing at 1037.50.

Crude oil closed higher on Thursday and the high range close sets the stage for a steady to higher opening on Friday. 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 75.58 are needed to confirm that a short term low has been posted. If October renews the decline off August's high, May's low crossing at 70.35 is the next downside target. First resistance is last Friday's high crossing at 75.21. Second resistance is the 20 day moving average crossing at 75.58. First support is last Wednesday's low crossing at 70.76. Second support is May's low crossing at 70.35.

Natural gas closed higher on Thursday as it extends the trading range of the past five days. The mid-range close sets the stage for a steady opening on Friday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If October extends this year's decline, weekly support crossing at 3.225 is the next downside target. Closes above the 20 day moving average crossing at 4.101 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 3.889. Second resistance is the 20 day moving average crossing at 4.101. First support is last Friday's low crossing at 3.697. Second support is weekly support crossing at 3.225.

Gold closed higher on Thursday and tested the 87% retracement level of the June-July decline crossing at 1253.30. Stochastics and the RSI are overbought, diverging but are neutral to bullish signaling that sideways to higher prices are possible near term. If August extends the rally off July's low, June's high crossing at 1267.10 is the next upside target. Closes below the 20 day moving average crossing at 1226.60 would confirm that a short term top has been posted. First resistance is Wednesday's high crossing at 1255.30. Second resistance is June's high crossing at 1267.10. First support is the 10 day moving average crossing at 1238.60. Second support is the 20 day moving average crossing at 1226.60.

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Phil Flynn: ISM Into The Wild Blue Yonder Flying High Into The Sky

Where the heck did that come from? The Institute for Supply Management gave the market just what the doctor ordered with a shocking good reading on manufacturing. Why was it so shocking? Well some of the regional manufacturing reports like the Philly Fed and the Empire State numbers were so lousy. Maybe the Chicago Purchasing Manger report should have given a clue but instead of lousy we go the first increase in four months with an expansive jump to 56.3, up from 55.5 in July.

That was much higher than the expected 53.2 expectations and came ohm the heels of a strong PMI number in China! And what was probably even more important was that the ISM Employment Index part of the report that registered 60.4 percent in August, which is 1.8 percentage points higher than the 58.6 percent reported in July. According to ISM this is the ninth consecutive month of growth in manufacturing employment. An Employment Index above 49.8 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment and should also beef up the expectations on Fridays whopping large monthly jobs report. It should also booster oil demand expectations as well as.....Read the entire article.

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Silver About To Break Out Big!

Silver is one asset class I do not cover very often, but have been largely bullish on since $6 an ounce many years ago. It can be considered “poor man’s Gold” as they say. I believe Silver is about to stage a pretty large advance based loosely on the Elliott Wave pattern I see unfolding after a 9 odd month consolidation. (Obviously, there are also fundamental fiat currency/debt events worldwide that give it the underlying bull chart pattern). Since the average person can’t run out and buy an ounce of Gold for $1,240 tomorrow, as the unfolding of the fiat crises continues to enter the public psyche, you will see a strong populace movement into buying silver, silver coins, etc. To wit, many silver stocks are moving up strongly of late, signally an imminent breakout of this precious and industrial metal.

The triangle pattern has taken nearly 9 months so far, and a move over $19.50 could start a multi-month run targeting $26-$29 per ounce for starters before a broad pullback. A few silver stocks worth looking at include SLW (Silver Wheaton, which purchases future silver mine production in advance at a discount), a long time favorite of mine and Fortuna Silver, a growing producer and explorer favored by some of the brightest minds in the business. I do not own shares in either, so I have no inherent bias to mention them other than they are worth your time to review sooner than later. TMTF does not offer stock or trading advice, so please do your own research and consult a professional if need be.

I post the Silver chart below and my outline shows my views of a multi month 5 wave bullish triangle pattern on a weekly chart. Silver needs to bust through $19.50 per ounce to confirm, but I suspect we will see this fairly soon.

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Crude Oil Futures Fall as U.S. Jobs Report Signals Slowing Economic Recovery

Crude oil fell as initial U.S. jobless claims bolstered concern that the country’s economy will be slow to recover, crimping fuel demand. Oil slipped as much as 1.1 percent as a report showed that the number of Americans seeking unemployment benefits decreased by 6,000 to 472,000 in the week ended Aug. 28. U.S. crude oil stockpiles climbed 3.43 million barrels to 361.7 million last week, an Energy Department report showed yesterday.

“Although jobless claims dropped a little, they are still above 470,000, which is a sign that the economy is still in a lot of trouble,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. Crude oil for October delivery fell 57 cents, or 0.8 percent, to $73.34 a barrel at 9:07 a.m. on the New York Mercantile Exchange.

Brent crude oil for October settlement lost 94 cents, or 1.2 percent, to $75.41 a barrel on the London based ICE Futures Europe Exchange. The increase in crude oil stockpiles left supplies 11 percent above the five year average for the period, according to the department. “U.S. inventories are pretty enormous,” said Alexander Ridgers, head of commodities at London based CMC Markets, which handles more than $150 million a day in U.S. crude contracts.

Overall petroleum stockpiles, a combination of oil and fuel supplies, climbed 4.04 million barrels, or 0.4 percent, to 1.14 billion, the highest level since at least 1990, according to yesterday’s report. “Supplies are ample,” McGillian said. “Yesterday’s inventory report showed that petroleum stockpiles were at a record high for a third consecutive week.”

Reporter Mark Shenk can be reached at mshenk1@bloomberg.net

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Crude Oil Daily Technical Outlook For Thursday Morning

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

Closes above the 20 day moving average crossing at 75.51 are needed to confirm that a short term low has been posted. If October renews the decline off August's high, May's low crossing at 70.35 is the next downside target.

First resistance is the 20 day moving average crossing at 75.51
Second resistance is Monday's high crossing at 75.58

Crude oil pivot point for Thursday morning is 73.35

First support is last Wednesday's low crossing at 70.76
Second support is May's low crossing at 70.35

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SP500 and Gold At Crucial Pivot Points

WOW that was some big short covering and buying today! And we hope you got a piece of it! Wednesday was a big session with better than expected manufacturing surging the market 3%. In this article I will do a quick technical take on the current situation for the SP500 and gold as they are both trading at a key resistance level. also its important to know what type of price action we will get in the next 1-2 days so you can have your profit targets or protective stops in place depending on which side of the market you are currently playing.

SPY – SP500 Exchange Traded Fund – 60 Minute Chart
The market is currently in a down trend which means bounces get sold. But if you take a look at the buying volume ratio at the bottom of the chart you will notice that in an uptrend buying surges are the beginning of a rally, and during a downtrend buying surges are the end of a rally. I also want to mention that a lot of volume traded at this current level which you can see on the volume by price bars on the chart. This means there will be a lot of sellers to overcome before breaking to the upside.

The situation the market is at now makes things difficult to tell if this bounce will get sold, or if its just the starting of a rally. There are several arguments for each side but the one which I think has the most influence is the buying volume. It was very strong on this current bounce. It feels more like a rally but we will not know for sure for a couple days…

That being said, if the SP500 moves up Thursday then I would consider the market to be in an uptrend and exiting any short positions is a smart play. But if this bounce is sold and the market drops, then the 3% rally on Wednesday could all be given back and then some.

GLD Gold Exchange Traded Fund – 60 Minute Chart
Gold has continued to grind its way up to the previous top. Problem is the volume has been very light and that tells me there is not much demand for gold at these elevated prices. While we are still long gold it is crucial to have your protective stop in place so we lock in as much profit as possible for when the sharp selling spike happens.

Mid-Week Technical Take:
In short, the market feels like its trying to reverse back up but at this time its still in a down trend and trading under a key resistance level. This means trading with the trend and selling the bounces is still the play.

That being said today’s strong volume makes this bounce suspect. Keeping positions small and setting a protective stop should be done as a safety precaution. The next couple days will shed some light for sure…

As for gold, I am still bullish but expecting our protective stops to be triggered any day now, which means we get paid and can mark another successful trade down on the scoreboard.

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Leaked German Military Report Warns Of Apocalyptic Peak Oil Scenarios

The German army doesn't want you to know how freaked out it is about peak oil. But an internal report has leaked to the internet, with excerpts translated by Spiegel. The report says there is "some probability that peak oil will occur around the year 2010 and that the impact on security is expected to be felt 15 to 30 years later."

Nightmare scenarios include:
Market failures: The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. "Shortages in the supply of vital goods could arise" as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95% of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse."

Global chain reaction: "A restructuring of oil supplies will not be equally possible in all regions before the onset of peak oil," says the study. "It is likely that a large number of states will not be in a position to make the necessary investments in time," or with "sufficient magnitude." If there were economic crashes in some regions of the world, Germany could be affected. Germany would not escape the crises of other countries, because it's so tightly integrated into the global economy.

Crisis of political legitimacy: The Bundeswehr study also raises fears for the survival of democracy itself. Parts of the population could comprehend the upheaval triggered by peak oil "as a general systemic crisis." This would create "room for ideological and extremist alternatives to existing forms of government." Fragmentation of the affected population is likely and could "in extreme cases lead to open conflict."

From Gus Lubin at Business Insider.Com.

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Where is Crude Oil and Gold Headed on Thursday?

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




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Phil Flynn: Earl, The Grinch That Stole Labor Day

All of the Who’s down in Whoville may be safe but it seems Hurricane Earl is bent on washing out and stealing their Labor Day fun! The holiday weekend may wash away for many states up and down the East coast.

As Hurricane Earl barrels down it will bring a crashing end to the summer gasoline demand season that was already not up to par with market expectations. The so called “Summer of Recovery” and the all of the gasoline and oil demand expectations that came along with it, now looks like it should be more appropriately titled “The Boulevard of Broken dreams”.

Up and down the Easy Coast of the United States, vacations, tee times, picnics and frivolity of all kinds are being canceled as that heartless monster, Earl, is showing us he has not learned the true meaning of the Labor day holiday which is to relax and burn up a lot of gas. And Earl has his accomplices and no, it is not a dog dressed up as a reindeer.

No, Earl's accomplice is a companion tropical storm named Fiona and a potential tropical wave behind that as well will, at the very least, assure us some very lousy weather for much of the East Coast from Florida with the worst in the Carolina’s all the way up potentially to New York.....Read the entire article.

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Crude Oil Climbs After Reports Show Gains in U.S., Chinese Manufacturing

Crude oil rose after manufacturing in the U.S. and China, the world’s biggest energy consuming countries, accelerated at a faster pace than expected in August. Oil climbed as much as 3 percent and equities rebounded from the biggest August slump in nine years after the Tempe, Arizona based Institute for Supply Management’s factory index rose to 56.3 from 55.5 in July. U.S. crude oil supplies increased 3.43 million barrels to 361.7 million last week, an Energy Department report showed today.

“Oil moves along with equities, the fundamentals don’t matter,” said Chip Hodge, who oversees a $9 billion natural, resource bond portfolio as senior managing director at MFC Global Investment Management in Boston. “Any shred of positive or negative economic news will move the oil market by a couple percentage points.” Crude oil for October delivery rose $2.26, or 3.1 percent, to $74.18 a barrel at 10:59 a.m. on the New York Mercantile Exchange. Oil traded at $73.63 a barrel before the release of the report at 10:30 a.m. in Washington.

Economists forecast the ISM factory index would decline to 52.8, according to the median of 78 projections in a Bloomberg News survey. Estimates ranged from 49.9 to 56. Manufacturing in China grew at a faster pace in August after the weakest performance since early 2009 in July, signaling that the economy’s slowdown is stabilizing.

Rising Index
The purchasing managers’ index rose to 51.7 from 51.2, exceeding forecasts, a government-backed report showed. Seasonal factors might have had an effect because the index typically gains as factories restart following July maintenance, Mizuho Securities Asia Ltd. said. A separate PMI released by HSBC Holdings Plc and Markit Economics gained to 51.9 from 49.4.

The August reading for the government index was more than the median 51.5 forecast in the Bloomberg survey of 17 economists. Fifty is the dividing line between expansion and contraction.
Australia’s economy grew at the fastest pace in three years last quarter, stoked by China’s demand for iron ore. Gross domestic product advanced 1.2 percent from the first quarter, when it rose a revised 0.7 percent, the Bureau of Statistics said in Sydney today.

Reporter Mark Shenk can be reached at mshenk1@bloomberg.net and Margot Habiby at mhabiby@bloomberg.net.

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Crude Oil Technical Outlook For Wednesday Morning

Crude oil was higher due to short covering overnight as it consolidates some of the decline off last Friday's high. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 75.88 are needed to confirm that a short term low has been posted. If October renews this month's decline, May's low crossing at 70.35 is the next downside target.

First resistance is Monday's high crossing at 75.58
Second resistance is the 20 day moving average crossing at 75.88

Crude oil pivot point for Wednesday morning is 72.73

First support is last Wednesday's low crossing at 70.76
Second support is May's low crossing at 70.35

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