Nymex Crude Tips Back Below $100 Per Barrel

U.S. oil futures slid back below $100 a barrel Thursday, reversing the previous day's gains, as doubts surfaced about the economy's ability to stomach high oil prices.

Light, sweet crude for December delivery settled down $3.77, or 3.7%, to $98.82 a barrel on the New York Mercantile Exchange. The December contract is set to expire at the end of trading Friday. The more heavily traded January contract settled down $3.67, or 3.6%, to $98.93 a barrel.

Brent crude on the ICE Futures Europe exchange recently traded down $2.89, or 2.6%, to $108 a barrel.

Nymex futures pushed lower on a wave of selling, as traders thought twice about whether $100 crude was sustainable given the cracks in the global economy. A sinking stock market in the U.S., combined with intensifying worries about Europe's sovereign debt crisis, took the wind out of a price rally that had dominated the oil market for the last several weeks.....Read the entire Rigzonearticle.


How to Trade Oil ETFs When $100 Per Barrel is Reached

Bloomberg: Crude Oil Climbs to Three Week High on G-20 Discussions and Retail Sales

Crude oil rose to a three week high as the Group of 20 began discussions in Paris on a solution to Europe’s debt crisis and U.S. retail sales climbed.

Futures increased 3.1 percent after G 20 and International Monetary Fund officials said the IMF may bolster its lending resources to help stem the crisis. U.S. retail sales advanced 1.1 percent last month, the Commerce Department said today. Brent oil in London traded at a record premium to West Texas Intermediate, the U.S. benchmark, for the second straight day.

“The debt crisis is far from over but it appears that they are making progress, which is bullish for oil,” said Michael Wittner, the head of oil market research at Societe Generale SA in New York. “Economic data, especially in the U.S., has improved recently. It’s now mixed, rather than negative.”

Crude oil for November delivery rose $2.57 to $86.80 a barrel on the New York Mercantile Exchange, the highest settlement since Sept. 20. Prices climbed 4.6 percent this week and have dropped 5 percent in 2011.....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