Rigzone: Crude Oil Gains; Natural Gas Surges

Crude oil for July delivery entered the holiday weekend in the black, gaining 36 cents to settle at $100.59 a barrel. Oil received a boost from a weaker dollar, which made the commodity a more attractive buy for investors holding currencies other than the greenback. The ICE Dollar Index, which tracks the dollar's value against foreign currencies, fell more than 0.8 percent Friday. Crude oil traded within a range from $100.04 to $101.24 Friday. For the week, oil is up 1.1 percent.

Memorial Day marks the traditional start of summer in the U.S., and summerlike temperatures should prevail throughout the Midwest, South, and East during the next two weeks. As a result, investors expect stronger demand for air conditioning and gas fired power. Natural gas consequently ended the day 18 cents higher at $4.52 per thousand cubic feet. The July contract price peaked at $4.56 and bottomed out at $4.365. Since last Friday, natural gas has gained 6.9 percent. June gasoline settled four cents higher at $3.09 a gallon. The futures price fluctuated from $3.04 to $3.08, and gasoline is up 5.1 percent for the week.


Posted courtesy of Rigzone.Com


Share

Crude Oil Rises to a Six Month High on U.S. Stimulus Bets

Crude oil surged to its highest level in six months as the dollar weakened against major currencies on speculation the Federal Reserve will take measures to stimulate the economy. Crude rose 1.2 percent as the dollar’s decline boosted the appeal of commodities as an alternative investment. The Fed will probably start a fresh round of stimulus tomorrow, announcing a plan to purchase at least $500 billion of long term securities, according to economists surveyed by Bloomberg News.

“It’s the weaker dollar and expectations for the stimulus package,” said Tom Bentz, a broker with BNP Paribas Commodity Futures Inc. in New York. “Half a trillion dollars was supposedly priced in since we rallied from September to October, but people are already anticipating that it could be larger.” Crude for December delivery rose 95 cents to $83.90 a barrel on the New York Mercantile Exchange, the highest settlement price since May 3. Oil has risen 7.4 percent in the past year.

The Fed, meeting in Washington today and tomorrow, is expected to announce a program of securities purchases to spur growth, reduce unemployment and increase inflation, said 53 of 56 economists surveyed by Bloomberg News. The Dollar Index, which tracks the U.S. currency against six major peers, slid 0.7 percent to 76.738 at 3:25 p.m. in New York, the lowest level in two weeks on a closing basis......Read the entire article.


Learn to Trade Futures in Just 90 seconds!

Share

Oil N'Gold: Crude Modestly Higher ahead of FOMC Meeting

Crude oil price climbed higher in Asian session on Monday as USD's decline ahead of the FOMC meeting raised appeal for commodities. Data showing strong manufacturing activities in China also boosted oil prices. Gold kept hovering around 1360. We believe either upside or downside surprise from Fed's QE should benefit positive for gold in the long term. However, a milder than expected dose of QE may trigger selloff in the metal in the near-term.

Economic data released last Friday were mixed. US GPD grew by an annualized pace of +2% (consensus: +2.2%) in 3Q10, from +1.7% a quarter ago. University of Michigan consumer confidence was revised down -0.2 points to 67.7 in October. While the ‘economic conditions' index rose +3.6 points to 76.6, the ‘expectations index' fell -2.7 points to 61.9.Chicago PMI, however, beat market expectations and improved to 60.6 in October. We believe the set of data should not alter the Fed's decision to announce new QE measure at the meeting this week.

The dollar fell against major currencies with the exception of Japanese yen. The market forecast the size of Fed's new bond buying program would be $1-2 trillion but it may begin by announcing $500B over several months or $100B per month. Apart from purchasing Treasury securities, the Fed may modify its language used in the accompanying statement. At the Boston Fed conference, Chairman Ben Bernanke said that 'clear communication about the longer run objectives of monetary policy is beneficial at all times but is particularly important in a time of low inflation and uncertain economic prospects such as the present' and the FOMC will continue to 'actively review its communications strategy with the goal of providing as much clarity as possible about its outlook, policy objectives, and policy strategies'.

China's PMI expanded to 54.7 in October from 53.8 a month ago. This is the fastest growth pace in 6 months and signaled the country's economy can sustain through the government's tightening measures. This is also positive news for the oil market as, according to IEA, China has overtaken the US as the world's largest oil user.

Let's Look at the Commitment of Traders....


Finding the Trend in the Foreign Exchange Markets

Share

Gold's Uptrend Unaffected by Surprising Fall after Bernanke's Comments

World financial markets were influenced by 2 important themes last week. These themes are expected to affect investment appetite and asset price movements in the medium term. The first is Fed's return to quantitative easing. As indicated in the September FOMC statement, most Fed members inclined to implementing additional easing measures to boost the economy. Apart from buying long term Treasury securities, members also talked about strategies to anchor inflation expectations.

These views were echoed by Fed Chairman Ben Bernanke during his speech at a Boston Fed conference on Friday. Bernanke said the Fed may expand asset purchases or change the language in its statement. He said that 'there would appear, all else being equal, to be a case for further action'.

Speculations for further QE have sent the dollar to a 15-year low against the yen and the USD index to the lowest level since December 11. Weakness in USD has caused abundant capitals flowing into emerging countries and pushed currencies in these countries higher. This has triggered some sorts of 'intervention' in emerging markets. For instance, Brazil and South Korea are stepping up attempts to control their currencies. This round of currency tensions have been driven by global economic imbalances.

While advanced economies have been trying to depreciate their currencies and urge emerging countries (such as China) to speed up appreciation, emerging economies are unwilling to accept the 'beggar thy neighbor' policy. The new rounds of QE and currency tensions are particularly influential for gold and the precious metal complex......Read the entire article.


Get your favorite symbols' Trend Analysis TODAY!

Share

Crude's Rally Derailed from Fundamentals Again

Strength in stock markets and decline in USD were the major reasons for the rises in commodities. In the US, Dow Jones Industrial Average climbed +2.2% to settle at 9820 while S&P 500 Index surged +2.6% to 1068.3 as driven by better-than-expected housing market (housing starts), employment situation (jobless claims) and improvements in manufacturing activities (Empire State and Philly Fed Index). The dollar weakened further with every rebound being treated an opportunity to sell as investors' risk appetite increases. In the coming week, the FOMC meeting will be market's focus. While the Fed will likely announce to keep its policy rate at 0-0.25% for an extended period of time, it may talk more about plans for exiting from the current stimulus policies.

Crude Oil
Crude oil price retreated to -0.6% to settle 72.04 Friday, the second consecutive day of fall as USD recovered after substantially weakened against major currencies in the past week. On weekly basis, the October contract reached 73.16 the highest and gained +4%. Recent rally in crude oil has been determined by movements in USD and stock markets, rather than fundamentals....Read the entire article

What are you waiting for....Here is 10 FREE Trading Lessons!

Oil Falls From 5 Week High, Gasoline Tumbles, as Dollar Climbs

Crude oil fell from a five week high and gasoline tumbled as the dollar increased against the euro, reducing the appeal of commodities as an alternative investment. Oil slipped as the greenback rose versus the currencies of six of the country’s major trading partners. Oil prices climbed as much 1.3 percent earlier today as a government report showed that U.S. job losses slowed and that the unemployment rate unexpectedly dropped for the first time since April 2008. “We rose initially at the release of the jobs data, but oil turned around once the dollar got stronger,” said Tom Bentz a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. "Prices are still close to $72, which is too high given where supply and demand are".....Complete Story

Oil Caps the Biggest Weekly Fall Since January on Demand Drop

Crude oil fell, capping its biggest weekly decline since January, on concern the global recession will curb energy consumption and as a stronger dollar reduced demand for commodities. Oil has plunged 10 percent this week on speculation fuel use in the U.S., the biggest energy using nation, will drop. The greenback has risen 0.7 percent against most major currencies since the beginning of the month.....Complete Story

4 FREE Videos for INO TV! Click Here

SP 500 Takes Crude Oil For A Ride Up, Commercials Increasing Short Positions

Even with the bull rush in crude oil commercials, which are the bulk of crude trading volume, are decreasing their open interest and increasing their short positions. Telling me they have no intention of being the ones caught holding crude oil at $72. Also, many traders believe that $70 dollars is the new "cheat" level for OPEC. The level where it becomes acceptable by their peers to ignore the production agreements.

Crude oil will get a free ride from the SP 500 Monday morning as we get a bullish spike in the markets. All of this will be slammed by any recovery on the U.S. Dollar and foreign currencies are all over bought at this point. Inventories will be big as always but Friday's unemployment numbers will be our biggest indicator of future demand.

Stochastics and the RSI are bullish in the SP 500 signaling that sideways to higher prices are possible near term. From a broad perspective, June needs to close above 929.00 or below 875.40 to clear up near term direction in the market.

Monday's pivot point, our line in the sand is 65.99

1st resistance is 67.29
2nd resistance is 67.95
3rd resistance is 69.25

1st support is 65.33
2nd support is 64.03
3rd support is 63.37

Natural Gas pivot point for Monday is 3.93

Stochastics and the RSI are turning bullish for natural gas signaling that a short term low might be in or is near. Closes above the 20 day moving average crossing at 4.057 are needed to confirm that a short term low has been posted. If July renews last week's decline, April's low crossing at 3.395 is the next downside target.

Current Futures Prices Click Here