OPEC Likely to Agree to Keep Output Target Unchanged

OPEC’s members are likely to decide to keep their output target for oil unchanged when they meet in December, Iran’s representative to the Organization of Petroleum Exporting Countries said.

Producers and consumers are satisfied with the current price level for crude, Iran’s Governor to OPEC Mohammad Ali Khatibi said, according to Shana, the Iranian Oil Ministry’s news website. “The situation is such that most OPEC members are expected to agree with maintaining the current level of oil production,” Khatibi said.

OPEC is responsible for 40 percent of global oil output, and the group’s 12 members are to meet Dec. 14 in Vienna to review output policy. Iran is OPEC’s second largest producer after Saudi Arabia. When the group last gathered on June 8, Iran and five other members rejected a Saudi proposal to raise output by 1.5 million barrels a day, and the meeting ended without agreement for the first time in at least 20 years.

The average price for OPEC’s main crude oil grades fell below $100 a barrel last week for the first time since Feb. 18, before rising back above that level on Oct. 6. The price for the so called OPEC basket of crudes advanced to $101.63 from $99.90 on Oct. 5, according to OPEC’s website. The basket price is calculated using one key export blend from each of the organization’s members and weighting each according to production.

Before last week, the OPEC price had exceeded $100 since the beginning of 2011. “Prices aren’t expected to fluctuate much,” Khatibi said.


Posted courtesy of Bloomberg News

Phil Flynn: United They Stand

United they stand, divided we fall and Greece's problems has Europe's back to the wall as divisions, divisions bring us down. So much for the euphoric rally on the hope and promise of a deal to meet Greece's debt obligations as divisions in the Euro Zone is stealing some of that incredible market momentum. This Greek tragedy continues to be a major driving force behind the value of oil and every stock and commodity around the globe.

The most obvious and direct impact on the price of oil is reflected in the value of the dollar. The day before yesterday when the market feared that a Greek default may lead to the end of the Euro Zone the dollar became the safe haven of last resort. The market feared that a breakup of the zone and a Greek default could create the same type of contagion mood the globe felt after the Lehman failure.

We see the market was predicting that an unmanaged Greek default would put the world into a deflationary downdraft. If Greece falls then what about Italy? Would they be next? How about Spain or Ireland? The market feared a freezing of the global economy and banking system as banks would refuse to deal with each other as they tried to determine their exposure to the Greek ruins.

Yet when the EU promised a deal that Europe would stand idly by while the world economy fell apart was well. Stocks and commodities soared across the board and the market now believes that there is no way that Europe would stand by while the global economic system fell apart.

In fact even a Financial Times report that said that a split over the terms of Greece’s second 109 billion Euro bail out developed wasn't enough to shake the confidence in the market that the EU would stand idly by while Rome or Athens burned. The FT said that" as many as seven of the bloc’s 17 members arguing for private creditors to swallow a bigger write down on their Greek bond holdings, according to senior European officials. The divisions have emerged amid mounting concerns that Athens’ funding needs are much bigger than estimated just two months ago. They threaten to unpick a painfully negotiated deal reached with private sector bond holders in July."

Still it did slow the buying as traders wait to see just what kind of deal would be done. We are still waiting.

The return of Libyan oil to the export market brought it the Brent/wti spread. We may have topped of course beware of a quick pop on positive bailout news. The API reported That crude oil increased by 568,000 barrels! Of Course the EIA should show a much larger increase as it catches up with the AP!.The API also showed a massive 4.63million barrel build in gasoline supply. Is anybody driving anymore?

We still feel the low for WTI oil is in for the year but we are nervous!

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Bloomberg: Crude Oil Gains on Optimism Europe Will Tame Debt Crisis, Boosting Fuel Demand

Crude Oil rose for a second day in New York on speculation European governments will contain their sovereign debt crisis, limiting its impact on the global economy and demand for raw materials.

Futures gained as much as 3.6 percent, trimming the biggest quarterly decline since the global financial crisis in 2008. U.S. Treasury Secretary Timothy F. Geithner predicted Europe will intensify efforts to contain its debt problems after being pressured at international meetings in Washington last week. European stocks climbed for a third day.

“It’s a ‘risk on’ day for oil,” said Thorbjorn Bak Jensen, an analyst at Global Risk Management in Middelfart, Denmark, who predicts Brent will average $107 in the fourth quarter. “Investors are hoping the European Central Bank will pull a rabbit out of the hat, in the form of an increase in the strength of the bond buying program.”

Crude for November delivery climbed as much as $2.90 to $83.14 a barrel in electronic trading on the New York Mercantile Exchange. It was at $82.62 at 1:44 p.m. London time. Oil has dropped 13 percent since the end of June, the biggest quarterly loss since the three months ended December 2008. Prices are down 7 percent this month and 9.6 percent this year......Read the entire Bloomberg article.


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Adam Hewison: Lloyds of London Pulls Deposits From Banks on Debt Crisis

As traders, we are bombarded with news. Some of it is useful, but a lot of it is just fluff to fill up airspace time. One piece that caught my eye this morning, which I haven’t seen reported in the main media, concerns the venerable Lloyds of London insurance company. This company was founded in 1688 in a London coffeehouse and has gone through wars, boom and bust cycles, every money mania known to man and has always managed to survive. The article claimed that Lloyds of London is taking their cash out of the European banks this morning. From Businessweek Magazine "Lloyds of London Pulls Deposits From Banks on Debt Crisis"

Quite frankly this is shocking, but not surprising given Lloyds’ survival instincts. Lloyds of London is one of the most conservative companies, run by some of the smartest people on the planet. Perhaps it’s an early warning sign about what could potentially happen in Europe.
It is something to think about.

Crude Oil Market Commentary
There is not much going on in the crude oil market, as it continues to remain in a fairly broad trading range with resistance very evident at the $90 a barrel level. Support comes into this market between $84 and 84.50 a barrel. The crude oil market is presenting a mixed picture at the moment with our longer term monthly Trade Triangle negative and our intermediate term weekly Trade Triangle positive. This has created a trading range at the moment. The crude oil market remains in a sort of sideways motion, but with a bias to testing the lower range of the Donchian trading channel.

The Williams % R indicator is stuck in the middle giving no real clue as to direction. Also pay attention to the MACD since it is beginning to lose momentum and could be rolling over to the downside if we have any more negative closes. We do not think that the crude oil market is ready to go higher, based on our long term monthly Trade Triangle which remains negative. The $90 a barrel resistance continues to stop this market on the upside. Look for crude oil to continue to move in a sideways to lower manner.

November crude oil closed lower on Wednesday as it consolidates below August's uptrend line crossing near 87.60. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Closes below last Monday's low crossing at 85.17 would confirm an end to the corrective rally off August's low while opening the door for a larger degree decline into the end of September. Closes above the May-July downtrend line crossing near 91.34 would confirm an end to this summer's decline.

First resistance is last Tuesday's high crossing at 90.60. Second resistance is the May-July downtrend line crossing near 91.34. First support is last Monday's low crossing at 85.17. Second support is the reaction low crossing at 83.47.

Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = – 75

OPEC’s $1 Trillion Cash Quiets Poor of the Middle East

Saudi Arabia will spend $43 billion on its poorer citizens and religious institutions. Kuwaitis are getting free food for a year. Civil servants in Algeria received a 34 percent pay rise. Desert cities in the United Arab Emirates may soon enjoy uninterrupted electricity.

Organization of Petroleum Exporting Countries members are poised to earn an unprecedented $1 trillion this year, according to the U.S. Energy Department, as the group’s benchmark oil measure exceeded $100 a barrel for the longest period ever. They are promising to plow record amounts into public and social programs after pro democracy movements overthrew rulers in Tunisia, Egypt and Libya and spread to Yemen and Syria.

Unlike past booms, when Abu Dhabi bought English soccer club Manchester City and Qatar acquired a stake in luxury carmaker Porsche SE, Gulf nations pledged $150 billion in additional spending this year on their citizens. They will need to keep U.S. benchmark West Texas Intermediate crude oil at more than $80 a barrel to afford their promises, according to Bank of America Corp.....Read the entire article.

Crude Oil, Gold and Natural Gas Market Commentary For Tuesday Afternoon

Crude oil closed down $0.58 a barrel at $85.87 today. Prices closed nearer the session high today. The bulls have faded after last Friday's very weak U.S. jobs report. I would not be surprised to see choppy trading mostly between $80 and $90 a barrel for the next few weeks.

Gold futures closed down 8.00 an ounce at $1,868.70 today. Prices closed nearer the session low today after hitting a fresh all time record high of $1,923.70 in overnight trading. Profit taking pressure was featured as the day wore on. A stronger U.S. dollar index and lower crude oil prices were also bearish factors for gold today. The fact that U.S. stock indexes had moved well off their daily lows by the time gold closed was also negated for the precious yellow metal.

Natural gas closed up 5.6 cents at $3.928 today. Prices closed nearer the session high today and saw short covering in a bear market. Bears still have the solid near term technical advantage. The next upside price breakout objective for the bulls is closing prices above solid technical resistance at $4.159.

The U.S. stock indexes closed weaker today but well up form the session lows. Last Friday morning's very week U.S. jobs report has sunk the indexes. Key for the stock index bulls is to hold prices above the August lows. If they can do that, then those lows will likely mark major lows. If U.S. stock indexes drop below the August lows, then fresh, serious chart damage would be inflicted to suggest a fresh leg down in prices in the near term. Trading action in the stock indexes this week will be extra important.


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Rigzone: Crude Oil Drops 1.2% on Economic Worries

Crude oil futures continued to retreat Tuesday as economic concerns weighed on the market. At its lowest in more than a month, light, sweet crude settled lower at $93.79 a barrel, down $1.10 from yesterday. Tuesday's trading session reached lows last seen on June 28.

Early Tuesday, a U.S. Commerce Department report showing a drop in consumer spending for the first time in nearly two years weighed down oil prices. The report also showed that incomes barely rose for the month of June. Analysts believe that the series of negative economic data is overshadowing the U.S. deficit-cutting package.

The Brent contract traded between $115.77 and $118.36, before settling at $116.46 a barrel on the ICE Futures exchange in London. The 35 cent day on day drop came on supply disruptions in the North Sea and a refinery fire in Taiwan.

Futures for September natural gas decreased 3.3 cents Tuesday, closing at $4.155 per thousand cubic feet. According to the National Hurricane Center, the Caribbean's latest storm Tropical Storm Emily could pick up strength in a day or two; but, as of now, the storm poses a low threat to the Gulf's output. Approximately 7.4 percent of the U.S. natural-gas production lies in the Gulf of Mexico.

Natural gas prices fluctuated between $4.135 and $4.23, maintaining a similar trading range to Monday's session. Gasoline blendstock for September delivery dropped for a fifth consecutive session, closing at $3.04 a gallon.

Posted Courtesy of Rigzone.Com

Rigzone: Crude Oil Climbs to a Three Week High in Tuesdays Trading

Crude futures climbed to a three week high Tuesday as concerns eased over Europe's debt crisis.

July's oil prices gained $2.11 Tuesday before settling at $102.70 a barrel on the New York Mercantile Exchange. The greenback fell against the euro as the European Union debated on sending additional financial aid to boost Greece's economy. Luxembourg Prime Minister Jean-Claude Juncker said a new aid package will be decided on by the end of June. A weaker dollar increases the appeal of the dollar denominated commodities making it cheaper for foreign buyers.

After noticing a 40 barrel spill at a pump station in Kansas, TransCanada temporary closed down its Keystone pipeline further pressuring oil prices Tuesday. The Keystone pipeline carries half a million barrels of crude per day from Alberta to Cushing, Okla., the largest oil storage hub in the U.S.

Oil prices peaked at $103.39 a barrel and bottomed out at $99.60 on Tuesday.

Natural gas for July delivery traded up Tuesday, adding 15 cents to settle at $4.67 per thousand cubic feet. Prices rose to their highest in four weeks on forecasts predicting above average weather. Hotter weather increases demand for fuel which is required for air conditioning. The intraday range for natural gas was $4.525 to $4.71 per thousand cubic feet.

Gasoline prices also ended higher Tuesday. After fluctuating between $3.07 and $3.165, gasoline settled at $3.15 a gallon, 5.84 cents higher from the previous trading session.


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Higher Interest Rates, Lower Volume.....Is This Run in Commodities Over?

With interest rates making a move upward this week, investors are questioning if the higher rates will make home loans and business loans more expensive to get. Stifling efforts by Congress and the Federal Reserve to strengthen the economy. Welcome to the new U.S. economy, this should be a sign of real economic expansion but it only brings new doubt that the governments stimulus package has any positive effect at all.

For now traders seem to be cautious about riding the bullish momentum in most commodities since they have real support from supply and demand principles. Crude oil is another story. With the failure to push through the $90 dollar per barrel level crude oil bulls were brought back to earth with the truth that we continue to have a glut of oil on the market. And yes, the good old days of having a couple of OPEC members mention the possibility of $100 oil moving the market are gone. Our "friends" in Saudi Arabia have proven to be the only real significant players in setting the price of oil. And it's obvious they prefer the $80+ range, just below what some believe is profitable for Iran. Coincidence?

For crude oil bulls to have any hope of getting their momentum back they need to defend the 20 day moving average at 85.83 and that appears unlikely as they watch their fellow traders head out to Florida and warmer weather for the holidays. Taking precious market volume with them. Here's your complete trading numbers for Wednesday morning......

Crude oil was lower overnight and trading below the 10 day moving average crossing at 88.40 signaling that a short term top might be in or is near. Stochastics and the RSI are neutral to bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 85.83 are needed to confirm that a short term top has been posted. If January renews the rally off November's low, May's high crossing at 93.29 is the next upside target. First resistance is last Tuesday's high crossing at 90.76. Second resistance is May's high crossing at 93.29. First support is last Friday's low crossing at 87.10. Second support is the 20 day moving average crossing at 85.83. Crude oil pivot point for Wednesday is 88.32

Natural gas was lower overnight as it extends Tuesday's breakout below the 20 day moving average crossing at 4.346 confirming that a short term top has been posted. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If January extends the decline off last week's high, the reaction low crossing at 4.126 is the next downside target. If January renews the rally off November's low, the 38% retracement level of the June-November decline crossing at 4.654 is the next upside target. First resistance is last Thursday's high crossing at 4.637. Second resistance is the 38% retracement level of the June-November decline crossing at 4.654. First support is the overnight low crossing at 4.230. Second support is the reaction low crossing at 4.126. Natural gas pivot point for Wednesday is 4.315

Gold was lower overnight as it consolidates some of this week's rally but remains above the 20 day moving average crossing at 1382.20. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near term. If March renews this year's rally into uncharted territory, upside targets will be hard to project. Closes below the 20 day moving average crossing at 1382.20 would confirm that a short term top has been posted. First resistance is last Tuesday's high crossing at 1432.50. First support is the 20 day moving average crossing at 1382.20. Second support is the reaction low crossing at 1352.00. Gold pivot point for Wednesday morning is 1401.90.


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Merry Christmas Crude Oil Bulls...From President Obama!

Is the second term of the Clinton presidency back? Even Bill couldn't have timed a better trade as President Obama let's it be known that he is willing to extend the Bush era tax breaks for an extension of unemployment benefits. This as our world currency [crude oil of course] hovers around the most critical level of 90+ a barrel. Is $90 our new support number? Is $100 a barrel in the cards in December? The rest of the week and especially Fridays close will tell us a lot, but for now here is your support, resistance and pivot numbers for Tuesdays trading.

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

If January extends the rally off last week's low, the 87% retracement level of May's decline crossing at 90.62 is the next upside target. Closes below the 20 day moving average crossing at 84.34 would confirm that a short term top has been posted.

First resistance is the overnight high crossing at 90.46
Second resistance is the 87% retracement level of May's decline crossing at 90.62

Crude oil pivot point for Tuesday morning is 89.23

First support is the 10 day moving average crossing at 86.23
Second support is the 20 day moving average crossing at 85.34

Natural gas was higher overnight as it extends the rally off November's low. Stochastics and the RSI are diverging but have turned bullish signaling that sideways to higher prices are possible near term.

If January extends the rally off November's low, the 38% retracement level of the June-November decline crossing at 4.654 is the next upside target. Closes below the 20 day moving average crossing at 4.271 would confirm that a short term top has been posted.

First resistance is the overnight high crossing at 4.545
Second resistance is the 38% retracement level of the June-November decline crossing at 4.654

Natural gas pivot point for Tuesday morning is 4.471

First support is the 10 day moving average crossing at 4.357
Second support is the 20 day moving average crossing at 4.271

Gold was higher overnight as it continues to rebound off the mid November low. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

If March extends this year's rally into uncharted territory, upside targets will now be hard to project. Closes below the 20 day moving average crossing at 1380.30 would confirm that a short term top has been posted.

First resistance is the overnight high crossing at 1429.40.
Second resistance is at 1438.10

Gold pivot point for Tuesday morning is 1418.40

First support is the 10 day moving average crossing at 1390.00.
Second support is the 20 day moving average crossing at 1380.30.



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Bloomberg: Crude Oil Rebounds From Four Week Low After Surprise Drop in U.S. Crude Supplies

Crude oil rebounded from a four week low as the growing prospect that Ireland will get a rescue bailout from the European Union stoked gains for stocks and commodities around the world. Crude rose as much as 2.1 percent, snapping four days of declines, after Ireland’s central bank governor said he expects the country to seek a bailout from the European Union and the International Monetary Fund. Yesterday’s Energy Department report showed crude inventories unexpectedly dropped the most since August 2009.

“The situation in Europe looks like it’s going towards a solution,” said Sintje Diek, an analyst with HSH Nordbank in Hamburg. “There will be a rescue for Ireland, and that’s good news for the euro. Fundamentals are on the side of investors; inventories are going down.” Crude for December delivery advanced as much as $1.70 to $82.14 a barrel on the New York Mercantile Exchange. It was at $81.72 at 11:37 a.m. London time. Brent crude for January settlement rose as much as $1.72, or 2.1 percent, to $85 a barrel on the London based ICE Futures Europe exchange.

The New York contract, which expires tomorrow, fell yesterday to $80.44, the lowest settlement since Oct. 19. The more actively traded January future was up $1.31 at $82.35. Crude slumped yesterday amid speculation that China, the world’s biggest energy consuming country, will raise interest rates to cool economic growth. Prices also dropped on concern Europe’s debt crisis is worsening. Oil has fallen 4 percent since last week and is up 2.7 percent this year......Read the entire article.



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Phil Flynn: The Commodities Got It In All Directions

Crude oil bulls got slapped everywhere they looked as a rate hike in Europe, weak manufacturing data in the US and growing concerns about Ireland's debt problems slammed commodities across the board. Perhaps the Fed knew that things are not that rosy and they were right to print all of that money.

Now with inflation running wild in China, the market knows that the Chinese are going to have to tap on the breaks, striking a major blow to global oil demand expectations. Over the longer term this is another critical time in this oil market when the price failed to capitalize and follow through on a breakout to new highs. Just 5 days ago oil hit a new 2 year high bring out a chorus of $100 a barrel predictions that many said that we would see by the end of the year.

These calls seem to me to be the same predictions we heard in the beginning of the year as oil hit 8395, a post economic crisis at least until the Dubai crisis sent oil price hurling back down to below $70.00. Then a UAE 10 billion dollar rescue plan and all was well in the oil market. Oil surged and hit a new high of 8715 in May and the $100 a barrel predictions were heard quite loudly.

That was before the Greece debt crisis which brought oil back down to 6424. Then of course it was the EU to the rescue with a massive bailout package and oil recovered slowly back to the eighties before settling back into the low......Read the entire article.

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Bloomberg: Crude Oil Rises as Reports Show Improved U.S. Economic Outlook

Crude oil climbed in New York after reports showed improvement in the U.S. economy, raising investor expectation fuel demand will increase. Futures retraced some of yesterday’s 2.4 percent decline as Asian equity markets gained following data showing jobless claims fell in the world’s largest economy. The New York based Conference Board’s index of leading economic indicators climbed 0.3 percent, matching the forecast of economists surveyed by Bloomberg News.

“For the short term, the positive economic indicators should support the prices,” said Tetsu Emori, a commodity fund manager at Astmax Ltd. in Tokyo. “Fundamentals aren’t what people are looking at for the market but currencies and financial market conditions.” The December contract added as much as 60 cents, or 0.7 percent, to $81.16 a barrel in electronic trading on the New York Mercantile Exchange, and was at $81.05 at 11:55 a.m. Singapore time. Yesterday it lost $1.98 to $80.56. The contract has fallen 1 percent this week.

Oil also rose as Labor Department figures yesterday showed U.S. initial jobless claims dropped by 23,000 to 452,000 in the week ended Oct. 15. Chinese crude production gained 9 percent in September, the National Bureau of Statistics said Oct. 21. Oil refining reached 8.5 million barrels a day last month, China Mainland Marketing Research Co. said......Read the entire article.



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Crude Oil Surges on Decline in Dollar, Smaller Than Projected Supply Gain

Crude oil climbed as the dollar tumbled to a 15 year low against the yen and a government report showed a smaller than forecast gain in U.S. stockpiles. Oil increased as much as 2.6 percent as the U.S. currency fell on concern the Federal Reserve’s regional business survey will show a slowing economic recovery. A weaker dollar bolsters the appeal of commodities to investors. An Energy Department report showed that supplies rose 667,000 barrels last week, less than half what was projected in a Bloomberg News survey.

“It’s all the dollar,” said Richard Ilczyszyn, a market strategist at Lind-Waldock, a broker in Chicago. The dollar will probably remain weak until after the Federal Reserve meeting and the congressional elections in November, he said. Crude oil for November delivery rose $1.90, or 2.4 percent, to $81.39 a barrel at 12:07 p.m. on the New York Mercantile Exchange. Oil traded at $80.18 a barrel before the release of the inventory report at 10:30 a.m. in Washington.

The November contract expires today. More active December futures increased $1.82, or 2.3 percent, to $81.98. Brent crude oil for December settlement gained $1.91, or 2.4 percent, to $83.01 a barrel on the London based ICE Futures Europe exchange. Futures in New York tumbled 4.3 percent yesterday, the biggest drop since Feb. 4, after an unexpected rate increase by China’s central bank raised speculation that fuel demand will drop in the world’s biggest energy-consuming country......Read the entire article.


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Commodity Corner: China Increases Rate, Crude Falls

Light, sweet crude futures plummeted Tuesday after China raised interest rates, sparking concerns that demand for raw materials could decrease and sending the dollar higher against the euro. Oil for November delivery fell 4.32 percent, or $3.59, settling at $79.49 a barrel, the lowest in eight months. The November contract expires Wednesday.

In an effort to slowdown China's rapid growth, the People's Bank of China Tuesday increased its lending and deposit rates by 25 basis points each for the first time since 2007. China's oil imports reached record highs in September. Investors fear that China's decision could hinder global growth and decrease its demand for oil and other commodities. Amid increasing U.S. stockpiles, traders turn to global demand; China, the second largest consumer of oil after the U.S., has become an important channel for oil supplies.

The dollar rose 1.8 percent against an index of foreign currencies, indicating wariness that the Chinese move may reduce economic growth. As the greenback gained momentum, demand for oil decreased. Oil prices fluctuated between $79.39 and $83.21 a barrel Tuesday. Meanwhile, Henry Hub natural gas futures rose Tuesday as traders sensed a buying opportunity after oil prices plunged. Front month natural gas settled up at $3.51 per thousand cubic feet, after plunging to a 13 month low of $3.40. In earlier trading, natural gas posted a session high of $3.53.

November reformulated gasoline blendstock, or RBOB, settled at $2.05 a gallon after declining 4.98 percent the biggest one day percentage fall in more than a year. The intraday range for gasoline was $2.04 to $2.15 a gallon.

Courtesy  of  Rigzone.Com

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Phil Flynn: Paying the Price for an Economic Recovery

While the Fed tries to sell us the virtues of inflation, the poor consumers at the pump are getting soaked. As oil prices rise and French strikers strike, we see the national average retail gas price start to surge as the price increased to $2.834 a gallon which is the highest price since May 17th. Retail Prices have surged close to 14 cents a gallon in three weeks which just happens to coincide with the price increase that we have seen in crude since the September, 21 Fed meeting.

Since the Fed sent the signal that the printing presses were about to roll we have seen crude add over 11 dollars a barrel from peak to valley, a move that has had an immediate impact on the price of oil at the pump. Gas prices are 26 cents, or 10%, above a year ago while demand for gas hit the lowest level in almost 8 months. Demand for gas is running about 4.8 percent below last year while gasoline stocks are 4.3 percent above a year ago. The threat of quantitative easing, while giving the stock market a lift, is giving consumers the squeeze. A fine price to pay to save the economy......Read the entire article.


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Crude Oil Falls as Report Shows Petroleum Demand Decreases to 10 Month Low

Crude oil fell after a government report showed U.S. petroleum demand dropped to the lowest level in more than 10 months as the economy struggled to recover. Crude declined for a third day this week after the Energy Department reported total petroleum demand decreased 0.7 percent to 18.3 million barrels a day in the week ended Oct. 8, the lowest level since the seven days ended Nov. 27, 2009. A Labor Department report today showed U.S. jobless claims unexpectedly rose to 462,000 in the week to Oct. 9.

“The demand numbers were very weak,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “We don’t really have a bull market unless we have stronger consumer demand.” Oil for November delivery fell 34 cents, or 0.4 percent, to $82.67 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Earlier today, futures rose to a one week high of $84.12. Prices have climbed 4.2 percent this year.

Brent crude for November settlement fell 35 cents, or 0.4 percent, to $84.29 a barrel on the ICE Futures Europe exchange in London. The Energy Department reported demand for gasoline decreased 2 percent to 8.81 million barrels a day, the lowest level since the week ended Feb. 12. Oil also declined as the report showed crude supplies fell 416,000 barrels last week, less than the American Petroleum Institute estimated yesterday......Read the entire article.


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Phil Flynn: It’s A Barrel Buster!

Crude oil rises after a barrel busting report. US total petroleum supplies hit the highest level in 29 years. Crude stocks are the highest since 1980. Gasoline supplies, the highest levels since 1990. The forward demand covers for supply, the highest since 1995. Demand for petroleum products dropped a whopping 6.4% and prices rise! So I guess this quantitative easing thing is a way to help oil companies and their bottom line. The Fed wants inflation and the Fed gets what it wants and is even thinking about going beyond their informal target rate. The Fed fear deflation and believe that the best weapon against it is inflation real or not.

The Wall Street Journal says that, “the rationale is that getting inflation up even temporarily would push "real" interest rates nominal rates minus inflation down, encouraging consumers and businesses to save less and to spend or invest more” Let’s see how that works for you. At the same time the US and China are getting testy about the currency rate as the Chinese are saying that forcing them to revalue or devalue their currency would lead to a disaster for the world. The set up is so bullish and commodities continue to......Read the entire article.


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Stock Market and Commodities Commentary For Tuesday Evening Oct. 5th

The U.S. stock indexes closed solidly higher today. The index bulls have the near term technical advantage and gained some fresh upside technical momentum today. The indexes last week hit fresh multi month highs. Traders are gearing up for Friday's U.S. employment report. Look for more subdued trading in the stock indexes until then, but then look for an active trading day on Friday, in the wake of the jobs data.

Crude oil closed up $1.26 at $82.73 a barrel today. Prices closed nearer the session high today and hit another fresh two month high. Bulls have the solid near term technical advantage in crude. Prices are in a six week old uptrend on the daily bar chart. The next near term upside price objective for the bulls is producing a close above solid technical resistance at the August high of $83.91 a barrel.

Natural gas closed up 4.4 cents at $3.771 today. Prices closed near the session high today and saw tepid short covering in a bear market. The bears still have the solid overall near term technical advantage. The next upside price objective for the bulls is closing prices above solid technical resistance at $4.00.

Gold futures closed up $24.50 at $1,341.30 today. Prices today closed near the session high and soared to a fresh contract and all time record high. A slumping U.S. dollar index continues to fuel the gold market bulls. Generally higher commodity markets today also supported fresh buying interest in the gold market. Gold bulls still have the solid overall near term technical advantage and gained more power today. There are still no significant early technical clues that a market top is close at hand.

The U.S. dollar index closed down 65 points at 78.00 today. Prices closed nearer the session low today and hit a fresh 8 1/2 month low. Prices also scored a bearish "outside day" down on the daily bar chart. Bears have the solid overall near term technical advantage. There are still no early clues to suggest a market bottom is close at hand.

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Crude Oil Trades Near Eight Week High After U.S. Stocks Fall, Goods Orders Gain

Crude oil traded near an eight week high in New York after equities slipped and orders for U.S. capital goods increased the most since March. Futures retreated yesterday after stocks declined for the third time in four days and the dollar advanced against the euro. The Commerce Department reported that orders for non military capital goods excluding planes climbed 5.1 percent. An Energy Department report tomorrow will probably show crude supplies rose last week, according to a Bloomberg News survey.

“It’s hard to justify a further move higher with stocks down and the dollar stronger,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We’ll see if we can consolidate here and keep an eye on this week’s economic reports.” The November contract traded at $81.39 a barrel, down 8 cents, in electronic trading on the New York Mercantile Exchange at 9:45 a.m. Sydney time. Yesterday it lost 11 cents to $81.47. Oil closed at $81.58 on Oct. 1, the highest level since Aug. 5. Prices are up 2.5 percent this year.

The Standard & Poor’s 500 Index dropped 0.8 percent to 1,137.03 at the 4 p.m. close in New York, and the Dow Jones Industrial Average shed 0.7 percent to 10,751.27. The dollar strengthened from a six month low against the euro as concern that Europe’s major banks are undercapitalized made the region’s assets less attractive. The U.S. currency traded at $1.3676 after falling 0.8 percent yesterday.....Read the entire article.

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