Oil Demand To Return To Pre-Recession High In 2012 - Report

World oil demand is set to grow next year for the first time since 2007 and return to pre-recession levels by 2012, according to IHS Cambridge Energy Research Associates in its quarterly World Oil Watch report. The rebound would mark a turnaround from the largest drop in global oil demand since the oil crisis of the early 1980s. IHS CERA expects oil demand growth to resume by 900,000 barrels per day (bd) in 2010 and return to its 2007 high of 86.5 million barrels per day (mbd) by 2012 a five year turnaround. "There are a lot of questions as to whether things will be 'different this time' in terms of the recovery of oil demand," said IHS CERA chairman and Pulitzer Prize-winning author of The Prize, Daniel Yergin. "While the answer is that it will be shorter, it is still going to take a substantial amount of time".....Read the entire article

How Low Can Natural Gas Go?

From guest analyst Jena Cartter of PCIFX, A New Horizon Of Perfection.

If one were to look up a textbook definition of a bear market, this year's natural gas market would be it. Yesterday, lead month Natural Gas futures fell to lows not seen since March of 2002, as the EIA weekly storage report showed 65 billion cubic feet (bcf) of gas was placed into storage last week. Although this figure was in line with expectations and well below the 95 bcf injected into storage this time last year, traders continued to focus on weak industrial demand as well as burdensome supplies.

Including last week's build, U.S. supplies of Gas in storage now total 3.323 trillion cubic feet (tcf), which is 18% above the 5-year average. It was a perfect storm for gas bulls this year, with industrial demand expected to be down just over 8.5% this year and summer cooling demand which never really materialized due to relatively cool summer weather in the Midwest and on the east coast. The market psychology is so bearish that traders have not been able to build a 'weather premium' into prices, despite entering the peak Atlantic hurricane season during the month of September. Should the storm season spare the Gas infrastructure in the Gulf of Mexico this year, it is possible we may see a record amount of Gas in storage going into the winter.

November 1st is considered the 'official' start of the heating season in the U.S., in which energy producers begin to draw Gas out of storing to meet heating demand. Some traders believe we may reach maximum storage capacity of just under 3.9 tcf before this occurs. The previous record was 3.545 tcf of gas in storage in 2007. Large speculators are holding a large net short position in Natural Gas futures according to the most recent Commitment of Traders report (COT). According to the COT, large non-commercial traders were net short 89,239 contracts as of August 25th. Small speculative traders were net long 49,161 contracts.

This information really highlights the trading styles of large and small speculators, as large speculators have historically been trend followers who will add to wining trades as the market moves in their direction. Small speculators like to try to pick tops and bottoms in a market, which is a difficult task for those lacking the funds to hold a position in the midst of a strong trending market.

Technical Notes
Looking at the daily chart for October Natural Gas, we notice prices accelerated to the downside once the July 13th low of 3.584 was taken out. This was the bottom of a two month long consolidation pattern that gave way in the direction of the major trend. The 14 day RSI is currently reading an extremely oversold 18.24, but has not yet shown any signs of reversing. 2.250 is seen as the next psychological support point for the October futures, with the 20 day moving average, currently near the 3.325 area, acting as resistance.

Visit the PCIFX website for more great analysis.

Oil Rises Above $71 as Dollar Tumbles, OPEC Ministers Gather

Crude oil rose above $71 a barrel after the dollar declined, spurring demand for commodities, and as OPEC ministers gathered in Vienna to decide on output levels. Oil increased the most in more than two weeks and gold climbed above $1,000 an ounce as the U.S. currency dropped to the lowest level this year against the euro and on speculation inflation will accelerate. The oil market is in “good shape,” Saudi Arabian Oil Minister Ali al-Naimi said, signaling the group is unlikely to change output quotas. “Today’s move in oil is all about the dollar and inflation concerns,” said John Kilduff, senior vice president of energy at MF Global in New York. “These concerns are also reflected in the gold market, which broke through resistance at the important $1,000 level”.....Read the entire article

Schlumberger CEO Says Smaller Services Companies to Fold or Merge

Chief Executive Andrew Gould of oilfield services giant Schlumberger predicts that further consolidation in the services industry, as well as the fall of smaller U.S. rivals, is likely to occur in the year ahead, according to a report by Dow Jones Newswires.

"There will be even more consolidation of smaller services companies in the U.S., if not mortality for some, as some will just not be able to service their debts," Gould said at the Offshore Europe conference in Aberdeen, Scotland.

Gould cited the cancellation or delaying of industry projects, which has made capital less readily available, as one of the primary challenges the oilfield services sector has faced during 2009.

From the staff at Rigzone

Crude Oil Rises the Most in More Than a Month as Dollar Tumbles

Crude oil rose the most in more than a month after the dollar declined, spurring demand for commodities, and as OPEC ministers gathered in Vienna to decide on production levels. Oil topped $71 a barrel and gold climbed above $1,000 an ounce as the U.S. currency dropped to the lowest level this year against the euro and on speculation inflation will accelerate. The oil market is in “good shape,” Saudi Arabian Oil Minister Ali al-Naimi said, signaling the group is unlikely to change output quotas.“Today’s move in oil is all about the dollar and inflation concerns,” said John Kilduff, senior vice president of energy at MF Global in New York.....Read the entire article

Crude Oil Daily Technical Outlook

Crude oil's consolidation from 67.43 is still in progress and further recover cannot be ruled out. But still, another fall is still in progress as long as 71.60 resistance holds. Break of 67.43 will indicate that fall from 75.0 has resumed for 65.23 support next. Break there will confirm the case that whole rise from 58.32 has completed and will bring deeper fall to test this key support level. On the other hand, strong rebound above 65.23, followed by break of 71.60 resistance will suggest that fall from 75.0 is a correction only and rise from 58.32 is still in progress. Intraday bias will then be flipped back to the upside for a 75.0 and then long term fibonacci resistance at 76.77 (38.2% retracement of 147.27 to 33.2]. In the bigger picture, there is no.....Read the entire article

Venezuela, Iran Ink Oil Invest Deals for South Pars, Dokobuki Field

Iran and Venezuela signed three oil deals Sunday during a Venezuelan presidential visit as the Islamic republic tries to mitigate the risk of new sanctions, Iranian news agencies said Monday. The accords were signed as Tehran is coming under increased international pressure over its nuclear program, including a threat to enforce sanctions against import products to Iran. The semi-official Mehr news agency said on Monday that Iran and Venezuela signed three memorandums of understanding in the energy sector in Tehran on Sunday as part of a visit to the country by Venezuelan President Hugo Chavez. They include two agreements of reciprocal investments in Iran and Venezuela each worth $760 million, according to Mehr and Shana, Iran's Oil Ministry news agency.....Read the entire article

Iran Sees OPEC Maintaining Current Oil Output

Iran, the second largest exporter of the Organization of Petroleum Exporting Countries, predicted on Sunday the cartel will maintain current oil output at its meeting next week, despite producers being unhappy with the prevailing price of crude. "There is a feeling among OPEC oil ministers that the group wants to maintain current ouput levels," Mohammad Ali Khatibi, Iran's representative to OPEC, told AFP ahead of Wednesday's meeting of the group in Vienna. "I think it is unlikely we will see any noticeable change. Based on comments already made by OPEC ministers, the output ceiling will not change." OPEC, whose 12 members pump 40% of the world's oil, agreed in late 2008 to remove a massive 4.2 million barrels a day of output from the market in a bid to shore up crumbling prices......Read the entire article

BP: Best in Class

Stephanie Link, director of research for Action Alerts Plus Portfolio, argues that BP's recent oil discovery provides much needed growth potential.



Get a current trend analysis for BP.....Just Click Here!

Thin Trading Seen In Commodties While Stocks Surge

Crude oil price continues hovering around 68 level in European morning. We believe thin trading remains throughout the as US and Canada are on public holidays. Stock markets in Asia and Europe gain amid expectations that G-20 leaders will collaborate to oversee the global financial system. Stock markets in Asia advanced with the MSCI Asia Pacific Index rising +1%. In Japan, Nikkei 225 Stock Average climbed +1.3% to 10320. In China, the Shanghai Composite Index edged +0.68% higher to 2881 and Hong Kong&'s Hang Seng Index gained +1.5% to 20629. In Europe, benchmark shares surge. UK&'s FTSE 100 Index opens higher and is currently rising +2.6% to 4923. Both Germany&'s DAX and France&'s CAC 40 also add +1.5% to 5465 and 3651, respectively. Finance ministers and central bank.....Read the entire article