Crude Oil Falls After Report Shows Gain in U.S. Fuel Supplies

Crude oil fell for the first time in three days in New York after a U.S. Energy Department report showed that inventories of gasoline and distillate fuel, a category that includes heating oil and diesel, increased. Gasoline supplies rose 2.94 million barrels to 214.4 million last week, almost three times the gain forecast by analysts in a Bloomberg News survey. Distillate stockpiles climbed 679,000 barrels to 171.8 million, the highest since January 1983. Oil fell earlier as the rising dollar reduced the appeal of energy to investors looking for an inflation hedge.

“This is a very bearish report,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “The product builds are significant and increase the cushion against any disruption. It takes uncertainty about refiners out of the equation.” Crude oil for November delivery fell 61 cents, or 0.9 percent, to $70.27 a barrel at 11:46 a.m. on the New York Mercantile Exchange. Prices have climbed 58 percent this year. Futures have traded between $65.05 and $75 since Aug. 1. Oil traded at $71.42 before.....read the entire article.

Phil Flynn: It's so Funny How we Don't Talk Supply Anymore

It's so funny how we don't talk supply anymore.

It's so funny how we don't talk supply anymore. But I ain't losing sleep and I ain't counting sheep. Yet today we may be counting barrels. Yesterday it was about increasing interest rates in Australia and conspiracy theories against the dollar. Oh no!, they are plotting against the dollar! Run and hide! Run and hide in commodities. Today it may be back to good old supply and demand. The Energy Information Agency releases there weekly snapshot of supply and demand and now the market will focus on the old fashion fundamentals if only for a moment. And judging by Last night’s American Petroleum Institute’s version this report may raise a few eyebrows, especially when it comes to distillate supply

The API reported a stunning week over week supply drop in distillates of 2.9 million barrels. This was the main feature of the report and the main reason it will fall into the bullish category. Heating oil stocks fell by 892,000 barrels. The API also reported a small drop in crude oil supply to the tune of 254,000 barrels most of which came in Cushing, Oklahoma the Nymex delivery point. Gasoline stocks rose a modest 544,000 barrels. Despite the fact that supplies in every category are well above normal, if the EIA reports similar number this should feed into the bullish momentum that has engulfed.....Read the entire article.

Crude Oil Daily Technical Outlook

While intraday upside momentum in crude oil is not too convincing, further rise is still in favor with 68.16 minor support intact. Break of 73.16 will indicate that fall from 75.0 has completed at 65.05 already. The corrective structure will in turn indicate that medium term rally is still in progress for another high above 75.0 before completion. On the downside, below 68.16 will suggest that rebound from 65.05 has completed and will flip intraday bias back to the downside. Break of 65.05 will affirm the original bearish view that crude oil has topped out at 75.0 already and will bring fall resumption towards 58.32 key support next.

In the bigger picture, the lack of follow through selling so far dampens the bearish view that crude oil's medium term rise from 33.2 has completed at 75.0. Nevertheless, risk remains on the downside as long as 73.16 resistance holds. A break below 65.05 support will solidify the case the crude oil has topped out in medium term again. In such case, deeper fall should be seen to test on 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) first and break will target a retest of 33.2 low. However, a break of 75.0 will indicate that rise from 33.2 has resumed for 76.77/90.24 fibo resistance zone (38.2% and 50% retracement of 147.27 to 33.2) instead.....Here is the charts!

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Profits Taking Tempers Early Gains, as Traders Wait For Inventory Numbers

Crude oil closed higher on Tuesday renewing the rally off September's low. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. Profit taking tempered early session gains as traders took a wait a see approach to the market ahead of Wednesday's weekly stocks report. The mid range close sets the stage for a steady opening on Wednesday.

If November extends today's rally, September's high crossing at 73.58 is the next upside target. Closes below Monday's low crossing at 68.05 would temper the near term friendly outlook in the market.

First resistance is today's high crossing at 71.97
Second resistance is September's high crossing at 73.58

First support is Monday's low crossing at 68.05
Second support is September's low crossing at 65.05

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Natural gas closed lower due to profit taking on Tuesday as it consolidated some of Monday's gains. The low range close sets the stage for a steady to lower opening on Wednesday. Despite today's setback, stochastics and the RSI are turning neutral to bullish hinting that sideways to higher prices are possible near term.

If November extends the rally off September's low, August's high crossing at 5.133 is the next upside target. Closes below the 20 day moving average crossing at 4.585 are needed to confirm that a short term top has been posted.

First resistance is today's high crossing at 5.12
Second resistance the August's high crossing at 5.13

First support is the 20 day moving average crossing at 4.59
Second support is last Friday's low crossing at 4.35

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The U.S. Dollar closed lower on Tuesday and the low range close sets the stage for a steady to lower opening on Wednesday. The dollar pushed lower overnight after Australia pushed its interest rate one quarter percent higher, making it the first of the G 20 nations to do so. Downside momentum increased after a news report indicated that Gulf Arab states, China, Russia, Japan & France are secretly working on a plan to end dollar-based trading in the oil market. Oil would be traded on a basket of currencies that also includes gold.

The parties involved strongly deny the report, but speculation ran rampant, catching the fears and imagination of currency traders. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term.

If December renews September's decline, monthly support crossing at 75.73 is the next downside target. If December renews the rally off September's low, September's high crossing at 79.29 is the next upside target.

First resistance is last Tuesday's high crossing at 77.73
Second resistance is September's high crossing at 79.29

First support is today's low crossing at 76.28
Second resistance is September's low crossing at 76.05

Barclays Technical Analysis: Oil’s Trend Line Key to $75

Crude oil futures may surpass this year’s $75 a barrel high if prices for the most active contract close above their 100 day moving average and a six month trend line, according to technical analysis by Barclays Capital.

November crude oil on the New York Mercantile Exchange has settled above its 100 day rolling mean each day for the past week. While this signals potential for gains, for prices to rally the contract must also close over a line connecting the lowest points between February and July, Barclays said.

“A close above these indicators would point to a push towards the high end of the range that’s held since the middle of June,” Barclays analyst MacNeil Curry said in a telephone interview from New York“.....Read the entire article.

Crude Oil Daily Technical Outlook

Crude oil's consolidation was contained above 68.10 and rise from 65.05 resumed by breaking 69.93 resistance. FUrther upside should be seen in near term to 73.16 resistance first. As discussed before, break there will indicate that fall from 75.0 has completed at 65.05 already. The corrective structure will in turn indicate that medium term rally is still in progress for another high above 75.0 before completion. On the downside, below 68.10 will suggest that rebound from 65.05 has completed and will flip intraday bias back to the downside. Break of 65.05 will affirm the original bearish view that crude oil has topped out at 75.0 already and will bring fall resumption towards 58.32 key support next.

In the bigger picture, the lack of follow through selling so far dampens the bearish view that crude oil's medium term rise from 33.2 has completed at 75.0. Nevertheless, risk remains on the downside as long as 73.16 resistance holds. A break below 65.05 support will solidify the case the crude oil has topped out in medium term again. In such case, deeper fall should be seen to test on 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) first and break will target a retest of 33.2 low. However, a break of 75.0 will indicate that rise from 33.2 has resumed for 76.77/90.24 fibo resistance zone (38.2% and 50% retracement of 147.27 to 33.2) instead.....Here is the charts!

Macroeconomic Forces Rescue Oil Prices Once Again

Maybe the economy isn't so bad after all. Thank you sir may I have another? Oil prices knocked for a loop after last Friday's jobs number came struggling back as the rest of the commodity complex brought the petroleum markets back kicking and screaming. A rebound in the non manufacturing number from the Institute for Supply Management took away some of the sting from last week's dismal jobs report. Oil tried to ignore the ISM non manufacturing number that showed that the service sector grew in September for the first time in a year, yet with all of the outside macroeconomic forces and commodities screaming higher in just about every other sector, it was not to be.

The index rose 50.9 percent from 48.4 percent in August giving us hope that perhaps there may be some energy demand after all. Now, throw in some rumors about the dollar's dominance and we saw oil fail to break the rock solid support at $68 a barrel and propel itself back into its endless trading range. Oil is moving lower but not in real terms but in dollar terms as nations are rumored to replace the dollar as its means of trade.....Read the entire article!

Oil Rises a Second Day as Weak Dollar Boosts Investment Appeal

Crude oil rose for a second day in New York as the dollar’s decline bolstered the appeal of commodities as a hedge against inflation. Crude traded near $71 a barrel as the dollar weakened following a report that Arab states held talks on replacing the U.S. currency in oil trades. Saudi Arabia’s central bank Governor Muhammad al-Jasser denied the report. Prices climbed yesterday after data showed U.S. service industries returned to growth following 11 months of contraction.

“The weaker dollar is always supportive for all commodities,” said Tobias Merath, a commodity analyst at Credit Suisse Group in Singapore. “We could see another couple of dollars upside for oil from the dollar, but it won’t be decisive. We’d need some change in the fundamentals to break out of this $68-to-$74 range.” Crude oil for November delivery rose as much as $1.22, or 1.7 percent, to $71.63 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.47 a barrel at 1:20 p.m. London time.....Read the entire article

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Crude Oil Higher, Bulls Take The Advantage Overnight

Crude oil was higher overnight as it extends last week's rally. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If November extends last week's rally, the reaction high crossing at 73.58 is the next upside target. Closes below Monday's low crossing at 68.05 would temper the near term friendly outlook in the market.

Tuesday's pivot point, our line in the sand is 69.75

First resistance is the overnight high crossing at 71.63.
Second resistance is the reaction high crossing at 73.58.

First support is the 10 day moving average crossing at 68.05.
Second support is the reaction low crossing at 65.05.

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Natural gas was higher overnight as it extends the rally off September's low. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near term.

If November extends the rally off September's low, August's high crossing at 5.133 then the 50% retracement level of this year's decline crossing at 5.320 are the next upside targets. Closes below last Friday's low crossing at 4.351 would confirm that a short term top has been posted.

Natural gas pivot point for Tuesday is 4.91

First resistance is the overnight high crossing at 5.08
Second resistance is August's high crossing at 5.13

First support is the 10 day moving average crossing at 4.84
Second support is the 20 day moving average crossing at 4.60

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The U.S. Dollar was lower overnight as it extends the decline off last week's high. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. If December extends the overnight decline, September's low crossing at 76.05 is the next downside target. Closes above last week's high crossing at 77.74 would confirm that a short term low has been posted.

First resistance is last Tuesday's high crossing at 77.74
Second resistance is September's high crossing at 79.29

First support is the overnight low crossing at 76.40
Second support is September's low crossing at 76.05