Oil Falls On Fed Warning, Petrobras Expands Abroad, Biggest Drop In Natural Gas In Two Months

"Oil Falls From Six Month High After Fed Warning on U.S. Economy"
Crude oil dropped from a six-month high after the Federal Reserve cut its forecast for the economy of the U.S., the world’s biggest energy-consuming country. Oil fell after minutes of the Fed’s Open Market Committee meeting in April showed that policy makers see “significant downside risks” to the economic outlook. The price decrease accelerated after U.S. jobless claims topped forecasts. Daily fuel demand in the past four weeks declined 7.6 percent from a year earlier, an Energy Department report showed yesterday. “The Fed comments triggered liquidation as we came in today,” said Gene McGillian.....Complete Story

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"Brazil's Lula Sees Petrobras Furthering Investments Abroad"
Brazilian state-run energy giant Petrobras (PBR) shouldn't be afraid to make investments overseas, President Luiz Inacio Lula da Silva said Thursday during a visit to Turkey. "[Overseas investments] will help the company have more access to sources of oil," Lula was quoted by the local Estado news agency as saying. "Gasoline prices, which are already cheap in Brazil, could become even cheaper [with more overseas exploration]." Petrobras will sign an exploration deal with the Turkish Petroleum Corp., or TPAO, Friday. The deal will cover exploration in the Black Sea, which Turkey.....Complete Story

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"Natural Gas Drops Most in 2 Months as Supply Gains in Recession"
Natural gas futures fell the most in eight weeks after a government report showed a bigger than forecast increase in U.S. inventories, as the recession cuts demand for the industrial fuel. Stockpiles rose 103 billion cubic feet last week to 2.116 trillion cubic feet, the Energy Department said. Analysts expected a gain of 95 billion. Supplies were 22 percent higher than the five-year average as factories and power plants trimmed purchases during the worst economic slowdown in a half century.
“This number surprised everyone it appears, so there’s a violent reaction,” said Brad Florer.....Complete Story

Crude Oil Lower As Markets React To Continous Job Claims

Crude oil traded lower overnight as most professional traders are looking for an over due retracement. We are still in a strong uptrend but it is apparent we have made a short term top. I look for bullish day traders to make a stand in the 60.50 - 61 area so watch volume closely as we trade through here, bears will start take profits in the 59+ area.

We will be watching the SP 500 closely as any move below 895.50 will have day traders trading the gap fill to 882.50, most likely taking crude oil with it.

Natural gas seems to be making a test of the 50 and 61.8% retracement lines which will only add to the crude oil sell off. This could be healthy for the bulls case if these levels can hold.

Thursday's pivot point, our line in the sand is 61.27

1st resistance is 62.67
2nd resistance is 63.67

1st support is 60.27
2nd support is 58.87

Crude Oil Closes Near Session High, Hit's New Six Month High

July crude oil closed up $2.05 at $62.15 a barrel today. Prices closed near the session high today and hit a fresh six month high. A lower U.S. dollar is supporting buying interest in crude. Bulls have the near term technical advantage and gained more upside momentum today. A four week old uptrend is in place on the daily bar chart.

July unleaded gasoline closed up 98 points at $1.7853 today. Prices closed near the session low after hitting a fresh six month high early on today. Bulls have upside technical momentum.

July natural gas closed up 7.9 cents at $4.109 today. Prices closed nearer the session high today and were supported on short covering in a bear market. Bears still have the near term technical advantage.

The June U.S. dollar index closed down 95 points at 81.10 today. Prices closed near the session low and hit a fresh 4 1/2 month low today. Prices are still in a 10 week old downtrend on the daily bar chart. Bears still have the near term technical advantage and gained more strength today.

Oil Prices Rise On Supply Decline, Morgan Stanley Trader Banned

"Oil Rises Above $62 on Larger Than Forecast U.S. Supply Decline"
Crude oil rose above $62 a barrel for the first time in six months after a government report showed that U.S. inventories declined more than forecast. Stockpiles dropped 2.11 million barrels to 368.5 million in the week ended May 15, the Energy Department said today. A 400,000-barrel decline was forecast, according to a Bloomberg News survey. Prices also climbed after refinery fires and unrest in Nigeria threatened supplies and the falling dollar spurred investors to purchase raw materials.

“We’re off to the races,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “The crude and gasoline inventory drops are very supportive to the market. The problems in Nigeria and refinery disruptions are contributing to the rally.....Complete Story

"Valero Energy Agrees to Acquire Interest in European Refining Assets"
Valero Energy Corporation has entered into an agreement to acquire The Dow Chemical Company's 45% interest in the Total Raffinaderij Nederland N.V. (TRN) for an enterprise value expected to be approximately $725 million, including working capital and inventories. TRN owns a crude oil refinery located in the Zeeland region of The Netherlands on the river Scheldt and has total throughput capacity of 190,000 barrels per day.

The transaction is subject to regulatory approval as well as a right-of-first refusal held by Total S.A., the refinery operator and owner of the remaining 55% interest in TRN. The transaction is expected to close in the third quarter of 2009.
Originally built in 1973, TRN's refinery received major upgrades in the mid-1980s, mid-1990s, and.....Complete Story

"Ex Morgan Stanley Trader Banned for Hiding Position"
A former oil trader at Morgan Stanley in London, who shorted oil futures without permission after an alcohol-fuelled lunch, has been banned by Britain’s financial regulator for trying to conceal his trades, the second time in a week it took action against one of the bank’s employees.

The Financial Services Authority banned David Connor Redmond, a former trader on the freight desk of Morgan Stanley’s commodities division, the regulator said today in a statement. Redmond built a “substantial” short position in WTI Futures on the ICE Futures Web-based trading platform in February 2008, concealing the position overnight and exposing Morgan Stanley to “the risk of incurring a significant loss,” the FSA said.....Complete Story

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.
Complete Story

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Crude Oil Overbought, Signals Still Turning Bullish

July crude oil was higher overnight as it extends this week's rally. Stochastics and the RSI are overbought, diverging but are turning bullish signaling that sideways to higher prices are possible near term.

If July extends this spring's rally, the 25% retracement of the 2008-2009 decline crossing at 68.49 is the next upside target. Closes below the 20 day moving average crossing at 56.37 are needed to confirm that a short term top has been posted.

Wednesday's pivot point, our line in the sand is 60.12

First resistance is Tuesday's high crossing at 60.99
Second resistance is the 25% retracement level crossing at 68.49

First support is last Friday's low crossing at 56.74
Second support is the 20 day moving average crossing at 54.37

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The June Dollar was steady to slightly higher overnight as it consolidated some of Tuesday's decline. Stochastics and the RSI are oversold, diverging but turning bearish again signaling that additional weakness is possible near term.

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. Closes above the 20 day moving average crossing at 83.77 would confirm that a short term low has been posted.

First resistance is Monday's high crossing at 83.33
Second resistance is the 20 day moving average crossing at 83.77

First support is Tuesday's low crossing at 81.97
Second support is the 87% retracement level crossing at 81.49

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The June S&P 500 index was higher overnight as it consolidates above the 10 day moving average crossing at 902.68. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term.

If June extends this week's rally, this month's high crossing at 929.00 is the next upside target. Closes below Monday's low crossing at 875.40 would confirm that a short term top has been posted.

I look for the day trading bulls to flood in on any pull back into the 895-899 range, selling into the pivot point before the end of the day,

Wednesday's pivot point, our line in the sand is 909

First resistance is Tuesday's high crossing at 915.80
Second resistance is this month's high crossing at 929.00

First support is the 10 day moving average crossing at 902.68
Second support is Monday's low crossing at 875.40

The June S&P 500 Index was up 2.50 points. at 909.00 as of 5:55 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.

10:30 AM Eastern Time

US Energy Dept Oil Inventories

Crude Oil Stocks (previous 370.6M)

Crude Oil Stocks (Net Change) (expected -700K; previous -4.7%)

Gasoline Stocks (previous 208.3M)

Gasoline Stocks (Net Change) (expected -1.2M; previous -4.1%)

Distillate Stocks (previous 147.5M)

Distillate Stocks (Net Change) (expected 700K; previous +1%)

Refinery Usage (expected 84%; previous 83.7%)

Weaker U.S. Dollar Supports Crude Oil Uptrend

June crude oil closed up $0.62 at $59.65 a barrel today. Prices closed near mid range today and did hit a fresh 5 1/2 month high. A weaker U.S. dollar is supporting buying interest in crude. Bulls have the near term technical advantage. A four week old uptrend is in place on the daily bar chart.

June natural gas closed down 19.0 cents at $3.949 today. Prices closed nearer the session low today. Bears still have the near term technical advantage and are regaining downside momentum.

The June U.S. dollar index closed down 72 points at 82.03 today. Prices closed near the session low and closed at a fresh 4 1/2 month low today. Prices are still in a 10 week old downtrend on the daily bar chart. Bears still have the near term technical advantage and gained more strength today.

The U.S. stock indexes closed mixed today after solid gains posted on Monday. Bulls still have some fresh upside near-term technical momentum. Bears are anticipating the "sell in May and go away" phenomenon that has occurred in the past. However, the recent rally in stocks has surprised most with its resilience. Too many analysts expecting a downturn has actually prolonged the rally.

Crude Oil Fluctuates Along With Equities, Supply May Decline

Crude oil futures fluctuated along with the stock market and on speculation that a government report tomorrow will show U.S. stockpiles and demand dropped. Oil and U.S. equities swung between gains and losses as housing starts unexpectedly dropped to an all time low. Crude oil stockpiles probably dropped 1.5 million barrels last week, according to a Bloomberg News survey conducted before an Energy Department report tomorrow. “A lot of oil traders are looking at equity markets for a signal of what the economy and demand picture will look like in the months ahead,” said Tim Evans, an energy analyst with.....Complete Story

Crude Oil Rally May Be Tempered By Housing Numbers

June crude oil was higher overnight and posted a new high for the month thereby renewing the rally off April's low. Stochastics and the RSI are overbought, diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near term. But worse then expected housing numbers this morning have demand concerns looming again and this may be enough to take us back to the 54-55 range that so many professional traders are calling the new bottom.

If June extends this spring's rally, the reaction high crossing at 65.00 is the next upside target. Closes below the 20 day moving average crossing at 54.72 are needed to confirm that a short term top has been posted.

Tuesday's pivot point, our line in the sand is 58.79

First resistance is the overnight high crossing at 60.48
Second resistance is the reaction high crossing at 65.00

First support is last Friday's low crossing at 56.07
Second support is the 20 day moving average crossing at 54.72

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The June Dollar was lower overnight and trading below the 75% retracement level of the December-March rally crossing at 827.50. Stochastics and the RSI are oversold, diverging 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 82.90 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 Monday's high crossing at 83.33
Second resistance is the 20-day moving average crossing at 83.99

First support is last 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 was higher overnight as it extends Monday's rally above the 10 day moving average crossing at 904.53. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near term.

For Tuesday day traders will be looking at two unfilled gaps. 924.75 to the upside and 882.25 to the downside. Everything looks bullish today so look for traders to go long over the daily pivot point with the first round of selling at the half gap fill 916.50. We may be looking at a double top if the bulls take us to the 924.75 area and beyond.

This morning's housing numbers may have a different idea as stocks like the XHB [homebuilders ETF] are reacting negatively to the numbers in pre market trading.

If June extends this week's rally, this month's high crossing at 929.00 is the next upside target. Closes below the 20 day moving average crossing at 886.33 would confirm that a short term top has been posted.

Tuesday's pivot point, our line in the sand is 902

First resistance is the overnight high crossing at 915.80
Second resistance is this month's high crossing at 929.00

First support is the 20 day moving average crossing at 886.33
Second support is the 25% retracement, this spring's rally crossing at 862.80

The June S&P 500 Index was up 7.80 points. at 914.90 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.

Crude Oil Closes Sharply Higher, Sets Up Higher Open On Tuesday

June crude oil closed sharply higher on Monday as it consolidated some of last week's decline. The high range close sets the stage for a steady to higher opening on Tuesday.

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

If June renews the rally off April's low, the reaction high crossing at 61.33 is the next upside target.

First resistance is last Tuesday's high crossing at 60.08
Second resistance is the reaction high crossing at 61.33

First support is last Friday's low crossing at 56.07
Second support is the 20 day moving average crossing at 54.16

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June Henry natural gas closed higher on Monday due to short covering as it consolidates some of last week's decline. The mid range close sets the stage for a steady opening on Tuesday.

Stochastics and the RSI have turned bearish warning bulls to use caution as a short term top might be in or is near. Closes below the 20 day moving average crossing at 3.828 are needed to confirm that a short term top has been posted.

If June renews this month's rally, March's high crossing at 4.609 is the next upside target.

First resistance is last Wednesday's high crossing at 4.575
Second resistance is March's high crossing at 4.609

First support is today's low crossing at 3.997
Second support is the 20 day moving average crossing at 3.828

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The June Dollar closed lower on Monday and the low range close sets the stage for a steady to lower opening on Tuesday. However, stochastics and the RSI are turning neutral to bullish hinting that a short term low might be in or is near. Multiple closes above the 20 day moving average crossing at 84.23 are needed to confirm that a short term low has been posted.

If June extends this month's decline, 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 83.11
Second resistance is the 20 day moving average crossing at 84.23

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