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

U.K. Gas Plunges on Excess LNG, Supplies From North Sea, Norway

U.K. natural gas contracts plunged amid lower than normal demand and excess flows of liquefied gas and fuel from the North Sea and Norway. Wholesale gas for same day delivery dropped as much as 13 pence, or 59 percent, to 9 pence a therm, according to broker ICAP Plc. That’s the lowest since October 2006 and equal to $1.49 a million British thermal units. A therm is 100,000 Btus. It was at 15 pence at 4:40 p.m. in London. Gas for the rest of the working week fell 6 pence to 17 pence a therm. U.K. gas demand in the 24 hours through 6 a.m. tomorrow is forecast at 173 million cubic meters, according to National Grid Plc data. That’s 9 million less than the last working day of last week and 37 million below normal for this time of year as the recession and unseasonably warm weather cut demand.....Complete Story

The Energy Report with Chris Vermeulen

The Energy sector seems to be a mixed bag. The weakness of the US dollar has help to boost the price of oil. Currently crude oil is threatening to break above the June high which will most likely trigger a surge of speculate traders/investors for buy crude oil. If the US dollar does find support in the coming weeks we should see the price of oil slide back down to the $60 per barrel level.

Natural gas as most of you know from my weekly writings is not something I am drooling over yet. It was every exciting two months ago with the bullish breakout but we avoided getting caught in the whipsaw action because of my low risk entry rules which confirm short term strength before we put our money to work.

Below is a 4 month chart of the Crude Oil price
This chart clearly shows momentum is up and the price of oil trying to move higher as it trades at resistance of the June high. We are close to a possible low risk buy signal but depending on the price action this week will dictate what happens.



Below is a 4 month chart of the Natural Gas price
Natural gas I will say has on ugly looking chart. The only observation I can really get out of this is that gas is trading at the bottom of its trading range which is $3.30 area, and the top of the range is $4.20. This is a 27% trading range and could be a great small spec trade at this price level. This type of trade is for a high risk taking trader. I would like to see the price move sideways 1-2 more days here so I know its not making another leg lower from here.



Energy Trading Conclusion:
There are several things which could happen here for oil and gas but in short my thought is if the US dollar continues to slide lower we will sell oil continue to rise and this will help boost natural gas prices some what. Because Natural Gas is at the low of its trading range there is a better chance we will see a higher price in the coming days for a small bounce. Natural gas has been underperforming the price of crude oil for 8 months which has happened in 2006 as well.

I continue to sit on the sidelines and watch the market unfold. Waiting is not the most fun but it is much better to wait than lose money on a bunch of high risk trades repeatedly.

Crude oil could have a low risk setup this week if all things work out. I am neutral on natural gas and not willing to jump on that rollercoaster.

If you would like to receive my Free Weekly Trading Reports or my Real Time Trading Signals for ETF’s and Stocks please visit my websites at Gold And Oil Guy or Active Trading Partner

To Your Financial Success,
Chris Vermeulen
The Gold and Oil Guy

Sinopec’s Net Surges on Fuel Prices; Beats Estimates

China Petroleum & Chemical Corp., Asia’s biggest refiner, said first-half profit rose more than four fold, beating estimates, after the government eased curbs on fuel prices and the nation’s economic recovery spurred demand. Net income increased to 33.2 billion yuan ($4.86 billion), or 0.381 yuan a share, from a restated 7.7 billion yuan, or 0.057 yuan a share, a year earlier, Sinopec, as China Petroleum is known, said in a statement to the Hong Kong stock exchange today. That compares with a 27 billion yuan median estimate in a Bloomberg survey of four analysts. The gain contrasts with earnings declines at Royal Dutch Shell Plc and Exxon Mobil Corp., the world’s biggest oil companies, after.....Complete Story

Oil Price Made New Year-High But Be Cautious When Interpreting Inventory Data

Early last week, the commodity market extended weakness in the previous week as risk sentiment turned more cautious on decline in stock markets (particularly sharp fall in stock markets in China) and strength in USD. However, since the middle of the week, impressive crude inventory draw, rebounds in equity markets and better-than-expected economic data revived investors' confidence. The Reuters/ Jefferies CRB Index added +0.5% on weekly basis. WTI crude oil price for October made a new year-high at 74.72 Friday after strong US housing data. The benchmark contract finished the day +1.3% higher to 73.89, the highest closing price since October 2008.....Complete Article

Possible New US Rules Are Wildcard for Commodity ETFs

Investors who want to buy a commodity exchange-traded fund need to perform a new type of calculus....Guessing which ones will be affected by possible new limits on speculators. Worries about regulators possibly curbing ETFs that hold commodity futures have been around since crude oil prices spiked last summer. But in the past few weeks, the threat has become much more real, hindering operations of funds that target commodities ranging from natural gas to wheat. Investors now face a guessing game about whether anticipated restrictions will affect still more funds.....Complete Story

More Regulation for Energy Futures?

Bank of America-Merrill Lynch Vice Chair Tom Petrie on U.S. and U.K. regulator's plans for regulation of energy futures markets.

Crude Oil Must Clear $73 or Face 25% Drop

Crude oil risks a decline of as much as 25 percent in the coming weeks if the market’s bulls are unable to break chart resistance above $73 a barrel after repeated attempts, according to Cameron Hanover Inc. Oil settled above $72 a barrel in the past two days, the closest test of its technical upside this month, and will sustain a rally only if prices rise above the June 30 peak, also the highest this year, said Peter Beutel, president of the New Canaan, Connecticut based trading adviser. The gains of about 25 percent made since the mid July drop to below $59 may unravel because of a failure to break resistance. "Crude needs to settle over $73.38 to initiate a new leg higher," Beutel said in an e-mail. "If we fail, we should drop all the way back to $58.20 to $59.25".....Complete Story

Oil Climbs to New 2009 High

Oil prices jumped Friday to a new high for the year after Federal Reserve Chairman Ben Bernanke said that the U.S. economy is nearing a recovery and other economic data backed him up. Benchmark crude for October delivery surged $1.81 to $74.72 after Bernanke spoke at an annual Fed conference in Jackson Hole, Wyo. By midday, oil was trading at $73.91, topping the previous annual high of $73.23 set on June 11. Oil started climbing early in the morning after financial information company Markit said its composite purchasing managers' index showed the European economy was stabilizing.....Complete Story

China's Importance Has Been Reflected Not Only In Base Metals, But Also In Energies

Crude oil price for October delivery tries to recapture the 73 level after pulling back to around 72 earlier today. While the market remains thrilled by oil's +8% rally in the previous 2 days after huge decline in crude stockpiles, we advise a closer look at the selloff earlier in the week. It indicated that China's impact is not only on industrial metals, but also on energy market. More importantly, the impact is growing bigger and bigger. According to the National Bureau of Statistics in China, crude oil production was 109.6M metric tons from January to July 2009, down -0.9% from the same period last year.....Complete Story