President Obama - New Wildcatter or Bait 'n Switcher?

On the last day of March, President Obama went to Andrews Air Force Base in Maryland to stand in front of an F-18 jet fighter called the Green Hornet, which is scheduled to fly powered by biofuel later this year, and announce he was recommending lifting offshore drilling curbs. The symbolism of pushing for more offshore drilling while highlighting biofuel for military jets was not lost on all observers. The announcement, when fully dissected, showed the administration made concessions in areas where they were destined to lose court cases, but they may actually be slowing down future offshore drilling. Yes, President Obama says he wants to open the East Coast waters from Delaware south to central Florida for offshore exploration, but ultimately it all depends on Congress signing on to the plan.

The administration made concessions in areas where they were destined to lose court cases, but they may actually be slowing down future offshore drilling. The staging symbolism was highlighted by the president's comments. In talking about his decision to open new coastal regions to offshore exploration, he said, "The bottom line is this: given our energy needs, in order to sustain economic growth we are going to need to harness traditional sources of fuel even as we ramp up production of new sources of renewable, homegrown energy."

In reality, the offshore drilling announcement was designed to win a few Republican senate votes for the potential energy bill being drafted by Senators John Kerry (D-MA), Lindsay Graham (R-SC) and Joseph Lieberman (I-CT). The legislation they are writing is designed to attack carbon emissions through cap-and-trade on a sector by sector basis rather than economy wide. That means the utility industry will have one set of regulations implemented on a certain date while refiners would have a slightly different set of regulations and a different date and manufacturers would have yet another set of regulations and implementation date.....Read the entire article.





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Transocean Maintains Strength In Numbers

The world's largest offshore drilling contractor with 141 jackups, semisubmersibles and drillships, Transocean has been able to maintain its strength through offshore innovation and acquisitions. Merging with Global Santa Fe in 2007 to cement its place as the world's largest offshore drilling fleet, Transocean has consistently set its sights on pushing the boundaries of technology. In fact, Transocean owned and operated the world's first ever jackup rig in 1954. Through the decades, the company has continued to achieve a number of industry firsts, and that spirit of innovation has helped to turn Transocean into an industry leader.....Complete Story

Profit Taking Tempers Early Gains in Crude Oil

Crude oil closed higher on Monday and tested the 20 day moving average crossing at 64.90. Profit taking tempered early gains and the mid range close sets the stage for a steady opening on Tuesday. 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 64.90 would confirm that a short term low has been posted while opening the door for a larger degree rebound during the last half of July. Closes below the 10 day moving average crossing at 61.38 would temper the near term friendly outlook in the market.

First resistance is today's high crossing at 64.90
Second resistance is the reaction high crossing at 73.38

First support is the 10 day moving average crossing at 61.38
Second support is last Monday's low crossing at 58.32

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Natural gas closed slightly higher on Monday and above the 20 day moving average crossing at 3.641 signaling that a short term low might be in or is near. Profit taking tempered early gains and the mid range close sets the stage for a steady opening on Tuesday.

Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If August extends the rally off last week's low, the reaction high crossing at 4.138 is the next upside target. Closes below the 10 day moving average crossing at 3.454 would temper the near term friendly outlook.

First resistance is last Friday's high crossing at 3.79
Second resistance is the reaction high crossing at 4.14

First support is the 10 day moving average crossing at 3.45
Second support is last Monday's low crossing at 3.23

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Crude Oil Closes Lower, Sets Up Lower Open Wednesday

Crude oil closed slightly lower due to profit taking on Tuesday as it consolidated some of this spring's rally. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought and are turning bearish signaling that a short term top might be in or is near.

If July extends the rally off April's low, the 38% retracement level of the 2008-2009 decline crossing at 82.38 is the next upside target. Closes below the 20 day moving average crossing at 66.90 would confirm that a short term top has been posted.

First resistance is last Thursday's high crossing at 73.23
Second resistance is the 38% retracement level crossing at 82.38

First support is the 10 day moving average crossing at 69.87
Second support is the 20 day moving average crossing at 66.90

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Lower Costs Give Crude Oil Drillers Some Breathing Room

A long awaited drop in the cost of drilling and maintaining wells has finally materialized, easing the pressure on oil and natural gas producers whose profits are being squeezed by lower prices.

Executives at the companies that own and develop fields complained for months that as tumbling energy prices ate into revenue, margins were being hurt by the stubbornly high cost of materials, labor and drilling services needed to get oil and gas out of the ground. In recent weeks, that has finally begun to change.

Lower costs, along with a modest rebound in oil prices to more than $55 a barrel, helped several companies deliver better-than-expected earnings in the first quarter.
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Short Term Top May Be In For Crude Oil

June crude oil was lower due to strength in the U.S. Dollar and profit taking overnight as it continues to consolidate some of the rally off April's low. Professional traders seem determined to buy the dips but stochastics and the RSI are overbought and are turning bearish signaling that a short term top might be in or is near.

At this point crude appears to be joined at the hip with the equity markets. The obvious correction in the markets has future demand destruction limiting the upside in crude oil. Keep an eye on Natural Gas though, as any continued rally in Nat Gas will take crude higher with it.

Closes below the 20 day moving average crossing at 53.72 are needed to confirm that a short term top has been posted. If June renews this spring's rally, the reaction high crossing at 65.00 is the next upside target.

Friday's pivot point is 58.06

First resistance is Tuesday's high crossing at 60.08
Second resistance is the reaction high crossing at 65.00

First support is the 10 day moving average crossing at 57.20
Second support is the 20 day moving average crossing at 53.72

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The June Dollar was higher overnight due to short covering as it consolidates around the 75% retracement level of the December-March rally crossing at 827.50. Stochastics and the RSI are oversold but are turning neutral to bullish hinting that a short term low might be in or is near. Closes above the 10 day moving average crossing at 83.20 would temper the near term bearish outlook in the market.

If June extends the decline off April's high, the 87% retracement level of the December-March rally crossing at 81.49 is the next downside target.

First resistance is the 10 day moving average crossing at 83.20
Second resistance is the 20 day moving average crossing at 84.42

First support is Wednesday's low crossing at 81.98
Second support is the 87% retracement level crossing at 81.49

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The June S&P 500 index traded lower overnight as it consolidates above support marked by the 20 day moving average crossing at 879.44. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

If the SP moves into the 892.50 area we look for the bears to make an entry, while crossing that point will easily allow the bulls to take us from 896 to 900.75. The consumer price index numbers and OPEX will influence the market today.

Closes below the 20 day moving average crossing at 879.44 would confirm that a short term top has been posted while opening the door for a larger degree decline this spring. Closes above the 10 day moving average crossing at 903.22 would temper the near term bearish outlook in the market.

Friday's pivot point, our line in the sand is 888.75

First resistance is the 10 day moving average crossing at 903.22
Second resistance is last Thursday's high crossing at 929.00

First support is the 20 day moving average crossing at 879.44
Second support is the 25% retracement, this spring's rally crossing at 862.80

The June S&P 500 Index was down 2.80 points. at 886.70 as of 6:01 AM CST. Overnight action sets the stage for a lower opening by the June S&P 500 index when the day session begins later this morning.


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Where do you think crude oil is headed? Please feel free to let our readers know what you think and leave a comment!


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"Exxon Begins Drilling at Point Thomson"

Exxon Mobil says it has begun drilling at Alaska's Point Thomson oil and gas field.
Patrick McGinn, a company spokesman, says drilling operations were launched Friday.

In February, Exxon returned eight of its Point Thomson leases that were part of 13 added to the field in 2002. Exxon had promised to drill wells and begin producing oil within four years, but no drilling occurred.

The state has been fighting with the Irving, Texas based oil giant and other lease holders over the lack of progress there.

Alaska officials have tried to cancel the leases, but in January it did allow Exxon to drill on two leases after the company said it would start production within five years.



How do you feel about big oil being pressured to use their leases or risk losing them? Feel free to leave a comment, our readers want to know what you think!


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Transocean Surprises, Crude Oil Closes Above $56, Investors Show Interest In Energy Stocks

"Crude Oil Rises Above $56 on Smaller Than Forecast Supply Gain"
Crude oil rose above $56 a barrel for the first time since November after a U.S. government report showed a smaller-than-expected increase in stockpiles. Crude supplies rose 605,000 barrels to 375.3 million last week, the highest since 1990, an Energy Department report showed. A 2.5 million-barrel gain was forecast by analysts surveyed by Bloomberg News. Companies in the U.S. cut fewer workers than economists forecast, indicating the worst of the recession’s job losses may have passed, a report showed today. “The speculators are piling into oil on signs that the economy is recovering,” said Sean Brodrick, natural resource analyst with Weiss Research in Jupiter, Florida. “Inventories rose only 600,000 barrels when everyone was expecting a gain of 2.5 million, gasoline supplies dropped and employers cut fewer jobs than expected”.....Complete Story

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"Investors Starting to Favor Energy Stocks"
The spring survey of America's money managers conducted by Barron's finds that energy stocks are moving back into favor among investors. In responding to the question to pick the best and worst performing industry sectors for the next 6-12 months, energy was ranked third in the best category and second to last in the worst. One money manager was quoted as saying he expects to see oil prices climbing back to $100 a barrel as a worldwide economic recovery spurs inflation and the Federal Reserve attempts in coming months to mop up all the liquidity it has pumped into the financial system. He characterized the challenge the Federal Reserve faces as "walking a tightrope," and he doesn't.....Complete Story

"Transocean Reports Smaller Than Estimated Decline"
Transocean Ltd., the world’s largest offshore oil driller, reported a smaller than estimated decline in first quarter profit as the company lowered costs in response to slowing demand. Net income dropped to $942 million, or $2.93 a share, from $1.15 billion, or $3.58, a year earlier, Geneva based Transocean said today in a statement. Excluding one time items such as costs to reflect the lower value of two rigs, per-share profit was 27 cents higher than the average of 31 analyst estimates compiled by Bloomberg.

Chief Executive Officer Robert Long reduced operating costs by 17 percent during the January to March period to cope with the lowest quarterly average crude price in more than four years. Energy producers such as BP Plc are delaying projects and slashing budgets to conserve cash.....Complete Story


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Crude Oil Closes Higher, Higher Prices Possible Near Term

June crude oil closed sharply higher on Friday and above the 20 day moving average crossing at 51.54 confirming that a short term low has been posted. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

If June extends this week's rally, the reaction high crossing at 54.81 is the next upside target. Closes below the 10 day moving average crossing at 50.21 are needed to confirm that a short term low has been posted.

First resistance is today's high crossing at 53.65.
Second resistance is the reaction high crossing at 54.81.

First support is the 10 day moving average crossing at 50.21.
Second support is Monday's low crossing at 48.01.

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The June Dollar closed slightly lower on Friday as consolidates some of Thursday rally. The mid range close sets the stage for a steady opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends the decline, March's low crossing at 83.14 is the next downside target. Multiple closes above the 10 day moving average crossing at 85.64 are needed to confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 85.53.
Second resistance is the 10 day moving average crossing at 85.64.

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

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

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target. Closes below the 20 day moving average crossing at 849.22 are needed to confirm that a short term top has been posted.

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

First support is the 10 day moving average crossing at 855.31.
Second support is the 20 day moving average crossing at 849.22.


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

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

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

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


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Crude Oil Falls On IEA, OPEC Forecast. Exxon Brazil Project Rivals Tupi

"Oil Falls After IEA, OPEC Cut Demand Forecasts Because of Global Recession"
Crude oil fell after the International Energy Agency and OPEC cut their global demand forecasts because of the recession in major consuming countries....Complete Story

"Uganda's Environment Body Approves Early Oil Output"
Uganda's environmental authority has approved an early production scheme by Tullow Oil, removing a legal hurdle for development of crude in the Albertine basin....Complete Story

"Exxon Mobil's Brazil Find May Hold 8 Billion Barrels of Oil, Rivaling Tupi"
Exxon Mobil Corp.’s oil discovery off the coast of Brazil may hold enough crude to rival the nearby Tupi prospect as the Western Hemisphere’s largest find in three decades....Complete Story

"South Korea Appeals To Nigerian Government Over Quashed Oil Deal"
Seoul's state energy firm said Thursday it has petitioned Nigerian President Umaru Yar'Adua to reverse his country's decision to scrap oil exploration rights awarded to a South Korean consortium....Complete Story

Crude Oil Industry Headlines News

"Petrobras' P-51 Kicks Off Production in the Campos Basin"
The P-51 semisubmersible platform went on stream Jan. 24, beginning production of well MLS-99 in the Campos Basin's Marlim Sul field....Complete Story

"Infrastructure Investment: Eni OKs 2 Greater Longhorn Developments"
For a combined investment of $341 million, Eni plans to add a subsea well to the Longhorn development and increase production capacity on the Appaloosa field's Corral platform....Complete Story

"Schlumberger Says Mideast Job Cuts Below 5% Global Average"
Schlumberger will cut jobs in the Middle East amid slowing oil field activities, but less than the global average of 5%....Complete Story