Thursday, September 17, 2009

Gas Fund’s Roll ‘Slaughtered’ Speculators, Boosted Volatility


Speculators trying to profit from the U.S. Natural Gas Fund’s roll of futures contracts got “slaughtered” and helped boost volatility as gas prices surged this week, said Adam Felesky, chief executive officer of BetaPro Management Inc.

Gas for October delivery rose 27 percent, through yesterday, on the New York Mercantile Exchange as traders had to cover their bets that the gas fund’s sale of the front month contract would reduce the price, said Felesky. Volatility jumped to the highest level since Amaranth Advisors LLC collapsed in September 2006.

Speculators shorted October gas, anticipating that the $4 billion gas fund would push prices down when it began selling its October contracts on Sept. 14, said Felesky, whose C$1 billion ($937.1 million) Horizons BetaPro Nymex Natural Gas Bull Plus ETF rolled around the same time as the larger fund.....Read the entire story

Oil Price Remains Firm As Strong Stock Market Offers Support


Strong trading momentum in crude oil persists and the benchmark contract rises further to 72.7 in European morning. Investors remain thrilled by the huge draw in crude inventory despite weak fuel demand. Advance in equity markets and weakness in USD also support prices. Stock markets in Europe open higher Thursday. UK's FTSE 100 Index climbs +1% tpo 5172 although the country's retail sales stayed flat in August from a month ago. The market had expected a +0.1% gain. On annual basis, the gauge rose +2.1% while July's sales were revised down to +2.9%. Both of DAX (Germany) and CAC 40 (France) gain +0.6% in morning session.

Stocks in Asia performed very well with the MSCI Asia Pacific Index rising +1.2%, In Japan, the Nikkei 225 Stock Average surged +1.7% to 10444 as the Bank of Japan upgraded its economic outlook on the nation. The BOJ stated that Japan' economy has shown 'signs of recovery', compared with the 'stopped worsening' comment made in the previous month. However, the central bank remained concerned about the downside risk to growth and hence maintained the policy rate at 0.1%.....Read the entire article with charts!

Wednesday, September 16, 2009

Oil Trades Near $72 After Supplies Drop to Lowest Since January


Oil traded near $72 a barrel in New York after the U.S. Energy Department reported that crude stockpiles in the biggest energy consuming nation dropped to the lowest level since January. Crude inventories fell 4.73 million barrels, the weekly report showed yesterday, more than the 2.5 million barrel decline forecast in a Bloomberg News analyst survey.

Prices also gained as the dollar declined to the weakest level in almost a year and as global equities advanced, spurring expectations of improving fuel demand.“The gains in equities support optimism for the economic recovery that would drive oil demand and lead to supply tightness,” said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore.....Read the entire article

New Video: Crude Oil Rises After EIA Report



New Video: USD$ Dollar Index UPDATE


The last time we made a video of this index was a little over two months ago. In that video our Trade Triangle technology predicted that we would see further weakness in the Dollar Index.

Guess what? This market has weakened substantially since our last video on July 14. We also pointed this out in a blog post on September 3rd.

Our Trade Triangle technology has really been on top of this market and captured every major move since inception. MarketClub’s “Trade Triangles” remain steadfastly bearish and there appears to be no lasting turnaround in the Dollar Index as of this writing.

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Is Resolution of Natural Gas Conundrum About to Emerge?


For most of this year, natural gas prices have moved counter to almost everyone's expectations falling while crude oil prices have risen dramatically. The conventional explanation has been that natural gas production coming from the newly completed wells in the prolific gas shale formations around the country is much greater than from traditionally located and drilled wells. The unanswered questions are when will this phenomenon of more productive wells coming on stream end and why are producers continuing to drill ANY gas wells in a sub $3 per thousand cubic feet (Mcf) world?

Why are producers continuing to drill ANY gas wells in a sub-$3 per thousand cubic feet (Mcf) world?

Some producers have claimed that they have been scaling back their gas drilling activity lately, despite the recent uptick in gas drilling rigs, but the backlog of drilled but yet to be completed wells is being worked down and that accounts for many of the prolific new wells coming on stream. The answer to why producers are willing to drill and complete wells in today's low gas price world is answered by the strong contango that has prices for natural gas one year into the future selling at nearly $2 per Mcf higher than current fiscal spot prices. The two charts below.....Read the entire article with charts!

Technical Analysis for Energy Markets


The key support level for the ascending channel remained intact in front of the crude oil's constant attempts to decline, to push the price to the upside and halt at correction level 67.8% for the last downside wave, seen in the image above. It appears that a constant slant is towards the upside; thus, continuing the general upside within the main ascending channel (shown in the secondary image), while taking into consideration that achieving this upside requires some key terms; first one being the breach of level 71.15 (correction 67.8%), the second is breaching the minor resistance level 72.40 (resisting the minor descending channel, which could force the price in declining once again), and the third being the most.....Read the entire article with charts

Bloomberg Analysis: Crude Oil Risks a Pullback to $59 if $66 Support Fails


Crude oil, struggling to sustain gains above $70 a barrel this month, faces a decline to $59 if support on technical charts fails in the coming days, National Australia Bank Ltd. said. Oil is likely to continue drifting in a sideways pattern as traders seek to gauge the market’s short term depth, according to Gordon Manning, a Sydney based technical analyst. Your keywordFutures, which touched a 10 month high of $75 a barrel Aug. 25, haven’t traded at $59 since mid July.

“It’s trying to find a bit of a base,” Manning said in a telephone interview. “A close below $66 would easily take it lower.” Crude oil yesterday rallied 3 percent, the most in a week, after Federal Reserve Chairman Ben S. Bernanke said the recession has probably ended, fanning expectations global demand would rebound. The contract for October delivery on the New York Mercantile Exchange traded at $70.28 a barrel, down 65 cents.....Read the entire article

Tuesday, September 15, 2009

Natural Gas Extends Gain From Seven Year Low as Economy Lifts


Natural gas advanced, extending its gain to 38 percent from a seven year low earlier this month, on speculation that a rebound in demand will reduce a surplus of the power plant and industrial fuel. Manufacturing in the New York region grew in September at the fastest pace in almost two years and U.S. retail sales jumped in August by the most in three years, economic reports today showed. Gas tumbled to $2.409 per million Btu on Sept. 4, the lowest price since March 2002, on a glut of the fuel.

“The market is starting to count in an economic recovery, which should bring with it an increase in demand,” said Peter Beutel, president of Cameron Hanover Inc., an energy consultant in New Canaan, Connecticut. Natural gas for October delivery rose 2.3 cents, or 0.7 percent, to settle at $3.32 per million British thermal units at 2:51 p.m. on the New York Mercantile Exchange after rising as high as $3.60. Prices are down 41 percent this year.....Read the entire article

Crude Consolidates Just Below $70 Barrel


Crude futures are returning earlier gains after failing to break through the psychological $70/bbl level following much better than expected Retail Sales data. The optimistic Retail Sales data is an encouraging development for battered U.S. consumption. A recovery in Retail Sales implies an improvement in broad based consumption, lifting the price of crude. However, the positive impact from the out performance of U.S. data is being countered by a collapse in the GBP/USD. BoE Governor King delivered another monetary shock today (refer to GBP/USD analysis), sending the Pound sharply lower against all of its major crosses. The negative performance of the GBP/USD is dragging on crude since it is a dollar denominated commodity. On the other hand, it is encouraging to see the EUR/USD and gold holding steady despite the.....Read the entire article