Majors Drilling In Brazil Despite Low Prices, Barclays Calls For $71 Oil, Crude Oil Lower On Inventory Fears

"Crude Oil Falls On Speculation U.S. Supplies Climbed Last Week"
Crude oil fell from a five month high on speculation a government report will show that U.S. supplies climbed to the highest level in 18 years. An Energy Department report tomorrow will probably show that crude oil inventories increased 2.5 million barrels last week, according to a Bloomberg News survey. Prices surged yesterday as the Standard & Poor’s 500 Index erased its 2009 loss and pending sales of existing U.S. homes jumped. “The market keeps rising on a rather shaky foundation,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. "You are still sitting on a lot of inventory".....Complete Story

"Foreign Oil Majors Drilling in Brazil Despite Oil Prices"
Foreign oil companies continue prospecting for crude at Brazilian concessions, including the key BMS22 block in the Santos Basin, despite a steep decline in oil prices and daunting costs. A series of high profile oil discoveries in the past few years has made Brazil one of the world's most exciting oil frontiers. Last week, state run energy giant Petroleo Brasileiro SA (PBR), or Petrobras, pumped the first crude from a Santos Basin sub salt well at the Tupi field. BMS22 is part of a cluster of promising Santos Basin blocks that have yielded several oil discoveries, including the nearby BMS11 block's Tupi the Western Hemisphere's largest oil discovery in 30 years.....Complete Story

"Oil May Break Resistance, Rise to $71.55: Technical Analysis"
Crude oil may be headed for $71.55 a barrel after breaking through $56.10 a barrel, according to Barclays Capital. Should the June crude oil contract push through the high of $56.10 a barrel reached on March 26, futures may climb past the Jan. 6 intraday high of $59.66 to $62 a barrel, Barclays Capital analysts, led by Jordan Kotick, said in a May 4 report. Oil could jump to $71.55 a barrel as traders attempt to exit the large number of short positions, or bets that prices will fall, creating a so called short squeeze, the analysts said. This is equal to the upward moves oil has made from a so called.....Complete Story

Crude Oil Lower Overnight, Higher Prices Possible Near Term

June crude oil traded slightly lower overnight as it consolidated some of Monday's rally but move higher as we close in on regular trading hours. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

If June extends last week's rally, April's high crossing at 55.85 is the next upside target. Closes below the 10 day moving average crossing at 51.42 are needed to confirm that a short term low has been posted.

We will be watching the SP 500 and the U.S. dollar closely as we expect a pull back in the markets to take crude oil down with it. We still are only playing crude on the long side as this bull run is a train we won't get in front of until the SP trades in the 950 area.

Tuesday's pivot point is 53.90

First resistance is Monday's high crossing at 54.64.
Second resistance is the reaction high crossing at 54.81.

First support is the 20 day moving average crossing at 51.59.
Second support is the 10 day moving average crossing at 51.42.

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The June S&P 500 index was slightly higher overnight as it extends the rally off March's low. Stochastics and the RSI are diverging but are 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 856.14 are needed to confirm that a short term top has been posted.

Tuesday's pivot point, our line in the sand is 895. Above 895 we are bullish and look to take profits near 1st resistance.

First resistance is the overnight high crossing at 913.25
Second resistance is January's high crossing at 924.75

First support is the 10 day moving average crossing at 884.50
Second support is the 20 day moving average crossing at 866

The June S&P 500 Index was up 0.40 points. at 903.20 as of 5:58 AM CST. Overnight action sets the stage for a steady to higher opening by the June S&P 500 index when the day session begins later this morning.

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The June Dollar was lower overnight as it extends last week's decline. Stochastics and the RSI are becoming oversold but 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. Closes above the 20 day moving average crossing at 85.44 would temper the near term bearish outlook in the market.

First resistance is the 10 day moving average crossing at 85.05.
Second resistance is the 10 day moving average crossing at 85.44.

First support is the overnight low crossing at 83.81.
Second support is March's low crossing at 83.14.


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Crude Oil Closes Higher, Bulls Have The Technical Advantage

June crude oil closed up $1.16 at $54.36 a barrel today. Prices closed near the session high today and hit a fresh three week high, amid a stronger U.S. stock market and a weaker U.S. dollar. Bulls are gaining fresh upside near term technical momentum.

The U.S. stock indexes closed solidly higher and closed at multi month highs today, amid some better U.S. housing starts data and ideas the U.S. economy has seen the worst. The bulls have gained fresh near term upside technical momentum. The fact that so many traders are looking for a downside correction soon is in fact a bullish technical clue.

The June U.S. dollar index closed down 76 points at 83.94 today. Prices closed near the session low and hit a fresh six week low. Bears are gaining downside near term technical momentum.


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Oil Hits Highest Prices In 5 Weeks, Alaska Projects Revving Up, Oil Execs On Energy Independence

"Oil Rises to Highest in 5 Weeks as Pending Home Sales Increase"
Crude oil rose to a five week high as the number of Americans signing contracts to buy previously owned homes jumped along with spending on U.S. construction projects, signaling energy demand may improve with the economy.

Oil climbed as much as 1.4 percent and the Standard & Poor’s 500 Index came within 1 percent of erasing its 2009 loss as the National Association of Realtors said the index of signed purchase agreements jumped 3.2 percent in March, compared with a 2 percent gain in February.....Complete Story

"Two New Projects Revving Up in Alaska's Oil Patch"
Oil prices are down and some oil-patch work is being throttled back, but North Slope producers are going full steam ahead on two large projects. Several hundred people have been put to work and the numbers will increase as the work continues, the companies involved say. One project underway is at Point Thomson, 60 miles east of Prudhoe Bay, where ExxonMobil Corp. is rigging up to begin drilling a large undeveloped gas and condensate field.

The company has completed the move of a large drill rig and other equipment to the site over 50 miles of ice road. Nabors Rig 19-E, one of the largest in Alaska, is now being reassembled. Plans are to start drilling in early May and continue operations through the summer.....Complete Story

"U.S. Energy Independence? Get Real, Oil Execs Say in Survey"
Most oil industry executives scoff at the idea that the U.S. can wean itself off foreign crude in the next couple of decades, a survey showed. Only 16 percent of oil and natural gas executives said that by 2030 the U.S. will be able to depend solely on its own energy supplies, according to a survey by KPMG LLP’s Global Energy Institute. A majority said it will be after 2015 before it’s “viable” to mass produce alternative energy.

“The executives’ perceptions of energy independence mirror their views on the viability of alternatives in the near term,” Bill Kimble, executive director of the institute, said in a statement. KPMG surveyed 382 U.S. financial executives in the oil and gas business last month.....Complete Story


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Crude Oil Appears To Be Consolidating Friday's Rally

Crude oil is trading lower as we close in on the regular trading session and was steady to slightly lower overnight as it consolidates some of last Friday's rally but remains above the 20 day moving average crossing at 51.46. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

If June extends last week's rally, the reaction high crossing at 54.81 is the next upside target. Closes below the 10 day moving average crossing at 50.69 are needed to confirm that a short term low has been posted.

Monday's pivot point for crude oil is 52.21

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

First support is the 20 day moving average crossing at 51.46.
Second support is the 10 day moving average crossing at 50.68.

Our weekly forecast is to buy the dips this week, selling into the 54.50 area as long as we continue trading this current range.

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The June S&P 500 index was higher overnight as it extends the rally off March's low. Stochastics and the RSI are diverging but are 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 851.44 are needed to confirm that a short term top has been posted.

Monday's pivot point, our line in the sand is 873

First resistance is last Thursday'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 860.52.
Second support is the 20 day moving average crossing at 851.44.

The June S&P 500 Index was up 5.60 points. at 881.70 as of 5:45 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.

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The June Dollar was steady to slightly higher overnight as it consolidates some of last week's decline. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term.

If June extends last week's decline, March's low crossing at 83.14 is the next downside target. Closes above the 20 day moving average crossing at 85.54 would temper the near term bearish outlook in the market.

First resistance is the 10 day moving average crossing at 85.42.
Second resistance is the 10 day moving average crossing at 85.54.

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


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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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Light Trading Volume Expected For May Day Holiday

June crude oil was steady to slightly lower overnight as it consolidates above resistance marked by the 10 day moving average crossing at 50.01.

The commodities markets will be effected by possible light volume on Friday due to the May Day Holiday being celebrated in much of Europe.

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 51.43 are needed to confirm that a short term low has been posted.

If June renews this month's decline, the reaction low crossing at 45.11 is the next downside target.

Friday's pivot point, our line in the sand is 51.01

First resistance is Thursday's high crossing at 51.94.
Second resistance is the reaction high crossing at 53.21.

First support is Monday's low crossing at 48.01.
Second support is last Tuesday's low crossing at 46.72.

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The June S&P 500 index was higher overnight as it extends the rally off March's low. Stochastics and the RSI are diverging but are neutral to bullish signaling that sideways to higher prices are possible near term.

That being said we see this as a swing day, a great opportunity to go short if we touch the high's of Wednesday. This market is trying to roll over for the bears.

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 849.26 are needed to confirm that a short term top has been posted.

Friday's pivot point, our line in the sand is 873.75

First resistance is Thursday'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 855.41.
Second support is the 20 day moving average crossing at 849.26.

The June S&P 500 Index was up 3.70 points. at 873.70 as of 5:59 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.

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The June Dollar was lower overnight as it extends this week's decline. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends this week's decline, March's low crossing at 83.14 is the next downside target. Closes above the 10 day moving average crossing at 85.63 would temper the near term bearish outlook in the market.

First resistance is the 20 day moving average crossing at 85.52.
Second resistance is the 10 day moving average crossing at 85.63.

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



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Crude Oil Thursday Evening Trading

Click on image to enlarge....

Crude Oil Closes Slightly Higher

June crude oil closed slightly higher on Thursday as it extends the rally off last week's low. The mid range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 51.62 are needed to confirm that a short term low has been posted. Closes below the reaction low crossing at 46.72 would renew this month's decline while opening the door for a possible test of the reaction low crossing at 45.08.

First resistance is today's high crossing at 51.94.
Second resistance is the reaction high crossing at 53.21.

First support is last Wednesday's low crossing at 46.72.
Second support is the reaction low crossing at 45.08.

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The June S&P 500 index closed slightly lower on Thursday as profit taking tempered early gains and the low range close sets the stage for a steady to lower opening on Friday. 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 847.51 are needed to confirm that a short term top has been posted.

First resistance is today'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 855.04.
Second support is the 20 day moving average crossing at 847.52.

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The June Dollar closed higher due to short covering on Thursday as it consolidated some of Wednesday's decline. The mid range close sets the stage for a steady opening on Friday. 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 85.80 are needed to confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 85.54.
Second resistance is the 10 day moving average crossing at 85.80.

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



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Crude Oil Steady Amid Flu Threats, Exxon Reports Lowest Profits In 5 Years

"Crude Oil Is Steady as Swine Flu Threatens Demand, Stocks Rally"
Crude oil was little changed as the World Health Organization said a pandemic declaration may come soon and economic reports signal that the worst of the global recession is over.

Fuel demand may drop as swine flu has the potential of being the first widespread influenza outbreak in 41 years. Initial U.S. jobless claims decreased last week, industrial output in Japan rose for the first time in six months, while U.K. consumer confidence climbed to the highest level in a year.

“We are probably looking at a pandemic which will reduce global growth to some extent,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. “There are increasing signs that the economy is starting to get better. In the end this.....Complete Story

"Shell CEO Says Job Cuts Imminent to Reduce Costs"
Royal Dutch Shell's Chief Executive Officer, Jeroen van der Veer, has confirmed that a reduction in the oil major's employment levels for 2009 is imminent in order to cut costs amid lower oil prices, according to Bloomberg, citing the Financial Times.

Specifically, van der Veer said that Shell must trim its costs to move forward with its intended investment plans while also keeping a close watch on its borrowing expenditures this year.

In March, Shell unveiled its plans to invest between $31-$32 billion in 2009 with dividends for the year expected to be some $10 billion, or a 5% increase of Q1 2009 dividend per share compared.....Complete Story

"Exxon Has Biggest Profit Drop in 5 Years as Oil Falls"
Exxon Mobil Corp., the world’s largest company by market value, posted its lowest profit in more than five years after the global recession sapped energy demand, pulling down oil and gasoline prices.

First quarter net income dropped 58 percent to $4.55 billion, or 92 cents a share, from $10.9 billion, or $2.02, a year earlier, Irving, Texas-based Exxon Mobil said today in a statement. Per-share profit was 3 cents lower than the average of analyst estimates compiled by Bloomberg. The earnings decline was Exxon Mobil’s biggest since 2002.....Complete Story


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