Oil Rises as Weaker Dollar Encourages Buying, Equities Climb

Crude oil rose for a second day as a weaker dollar encouraged investors to buy commodities and stronger equity markets signaled optimism the economic recovery remains on track. Oil rose, tracking stock markets in Europe and Asia, as the Group of 20 nations agreed on steps to shore up the global financial system. The U.S. currency weakened against the euro for a second day. All 26 analysts surveyed by Bloomberg News predicted OPEC will maintain its production target at 24.845 million barrels a day at a Sept. 9 meeting in Vienna. “Oil is a bit supported by the weaker dollar and stronger equities,” said Eugen Weinberg, a senior analyst with Commerzbank AG in Frankfurt. “We know that OPEC will not cut, the question is how this will be taken by the market”.....Read the entire article

Crude Oil Falls Below $68 on Speculation Global Supplies Ample

Crude oil dropped below $68 a barrel on speculation supplies are ample as the end of summer driving in the U.S. compounds already weak global demand. A report tomorrow will probably show consumer credit in the U.S., the world’s largest oil consumer, fell for a sixth month as banks restricted lending and rising unemployment damped borrowing. OPEC member states are unlikely to change output levels when they meet this week, Agence France-Presse reported, citing Iran’s representative to the group, Mohammad Ali Khatibi.“The trade is kind of anticipating a period of slack seasonal demand coming up, which I think is possibly going to keep the upside fairly limited,” said Toby Hassall, research analyst with Commodity Warrants Australia Pty in Sydney. “We’ll just have to see if the refineries start to scale back their runs”.....Read the entire article

Natural Gas: Extreme Contango Suggests Caution for E&P Companies

The price of Natural Gas is hovering just below $3, which is about the median price over the past two decades. Or is it? While the spot price has garnered lots of headlines recently for its collapse, the future price has declined much much less so. The quoted price for a year from now is above $5. Clearly the spot price is very depressed relative to the future price. In fact, it is at a record percentage differential. In the chart below (click to enlarge), I have divided the one year forward price by the 1-month forward price. The mean spread has been 6%. You will see I included lines for +/- 2 standard deviations as well. The current relationship is more than 4 standard deviations from the mean. At this point.....Read the entire article

Where is Oil Headed Next Week?

CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed next week.

Despite sliding prices, the LNG keeps coming

Despite the steady drop in natural gas prices, Gulf Coast liquefied natural gas terminals are expecting a steady stream of shipments in the coming weeks. Cheniere Energy’s Sabine Pass terminal received an LNG shipment at its dock this week and a second tanker is due by the middle of next week. And the Trunkline LNG terminal in Lake Charles, La., could see as many as three new tanker loads of LNG in the coming weeks, according to Waterborne Energy, a Houston-based LNG market tracking firm. “The last place you would expect to see a potential 20 bcf build in LNG imports in today's weak natural gas environment would be the U.S. Gulf,” Waterborne Energy said in a report Thursday.....Read the entire article

Gold Shines Again While Crude Loses Glitter

Star of the week was obviously gold which broke out of recent broad trading range and set to resume the long uptrend with target above 1000. We find the rally impressive as the dollar remained range bounded. While momentum looks strong, we would be more convinced that the precious metal will make new high above 1033.9 if a close above 1000 is seen. We will have 3 central bank meetings in the coming week, namely RBNZ, BOE and BOC. While we expect no change in monetary policies, policymakers' outlook on economic development and exit strategies from stimulus should provide guidance on currency and gold movements.On the other hand, crude oil's rally has lost steam after jumping to 75. Focus next week will be OPEC's meeting, although it's broadly anticipated that the cartel will not alter production quota. In coming months, crude oil should trade within a range of 65-75.....Read the entire article

Why $200 Oil Is Just Around the Corner

Jeff Rubin believes that oil prices are going to escalate much higher. In his book "Why Your World is About to Get a Whole Lot Smaller," Rubin foretells $200 oil and a vastly transformed global economic picture coming into focus very soon. The premise of Rubin's book is that oil is a finite resource and so called "easy" oil is waning. Inevitably production will be unable to keep up with the growing demand worldwide, and the price of oil will skyrocket.

The chief economist at CIBC World Markets in Canada for 20 years, Rubin correctly predicted the price of oil reaching $50 in 2005 and $100 in 2007. No one believed him then, either. "There continues to be widespread skepticism regarding my oil price forecast," Rubin told Rigzone. "As I noted in the book, few people have ever changed their minds during the entire history of the peak oil debate, at least insofar as 'experts' are concerned".....Read the entire article

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Technical Analysis: Crude Oil Is on ‘Slippery Slope’ Toward $60

Crude oil is on a “slippery slope” after failing to break through resistance and is set to test support at $60.43 a barrel, according to technical analysis by Auerbach Grayson, a brokerage in New York. The failure of October oil futures to breach $75.27, the June 11 high, has made crude vulnerable to “significant decline,” according to Richard Ross, a technical analyst at Auerbach Grayson. Futures dropped more than $7 since touching $75 a barrel on Aug. 25. “We are right on a precipice here and are at a very important inflection point,” Ross said in a telephone interview. Settling below $68 a barrel yesterday “opens the door to testing $65 and $60.43, which was the low on July 13”.....Read the entire article

Mexico's Calderon: BP's Deepwater Find A Wake Up Call

Mexico needs more reforms to rapidly tackle the deep waters of the Gulf of Mexico and shore up plummeting domestic oil production, President Felipe Calderon said Thursday. Calderon said BP PLC's giant deepwater oil discovery in the Tiber field, announced Wednesday, should serve as a wake up call for Mexico. State run Petroleos Mexicanos is legally blocked from teaming up with foreign oil companies that have more experience in the area."I hope this sign from the Gulf of Mexico tells us something," said Calderon in a radio interview.....Read complete article