Interior Boss Says No to Drilling on 8 Utah Parcels

Eight of the 77 oil and gas lease parcels sold during a December auction that a saboteur wrecked and a federal judge later halted will be off limits to drilling, Interior Secretary Ken Salazar has decided. Allowing development on the 7,670 public acres near Canyonlands and Arches national parks, Desolation Canyon and Nine Mile canyon could harm critical sage grouse habitat with little obvious benefit to oil and gas development, concluded a 39 page analysis released Thursday.

During a Washington news conference, Salazar said 52 parcels would be held back pending further study and 17 would be allowed back at upcoming auctions. Drawing from the report compiled by an 11 member team from the U.S. Bureau of Land Management, National Park Service and Forest Service who examined more than 103,000 acres from the ground up Salazar scolded the Bush administration for allowing the Dec. 19 auction in Salt Lake City to go forward.....read the entire article.

Phil Flynn: Global Warming Takes a Holiday!

Get the ear muffs out. Oil bears gets frosted as cold temperatures give the energy complex a Columbus Day boost. Global warming takes a holiday as heaters across the country seemed to go on much earlier than usual. Stunning records for cold were set across the nation increasing the demand for heating fuels over the weekend. The Chicago Marathon, according to the Chicago Tribune, had its coldest start since a 33 degree low in 2002 which they say was a far cry from 2007 when temperatures soared into the upper 80s and officials canceled the marathon after 3 1/2 hours into the event. In Denver it was reported that an artic cold front moved in and broke a cold temperature record that stood for 104 years.

In fact on Friday, Denver saw temperatures plunge 23 degrees in five hours setting the stage to make that record low. There were record lows in many parts of the country like Wyoming, Utah, Illinois and Iowa and if records were not broken in many areas it was extremely close. The early blast of winter is giving oil a bit of a boost on this lightly traded holiday market. It kind of makes you wonder what happened to global warming. In fact that is what the BBC is wondering in an article titled, "Whatever happened to Global Warming?" The BBC said, “This headline may come as a bit of a surprise, so too might that fact that the warmest year recorded globally was not in.....Read the entire article.

Crude Oil Higher as Net Long Positions Return to 2009 High

Crude oil was higher overnight as it extends the rally off September's low. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If November extends the rally, September's high crossing at 73.58 is the next upside target. Closes below the 20 day moving average crossing at 70.22 would temper the near term friendly outlook in the market.

Monday's pivot point, our line in the sand is 71.58

First resistance is the overnight high crossing at 73.13
Second resistance is September's high crossing at 73.58

First support is the 10 day moving average crossing at 70.54
Second support is the 20 day moving average crossing at 70.22

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Natural gas was higher due to short covering overnight as it consolidates some of last Friday's decline. Stochastics and the RSI are diverging and are neutral to bearish signaling that a short term top might be in or is near. Closes below the reaction low crossing at 4.351 would confirm that a short term top has been posted.

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.

Nat gas pivot point for Monday is 4.84

First resistance is last Tuesday's high crossing at 5.12
Second resistance is August's high crossing at 5.13

First support is last Friday's low crossing at 4.75
Second support is the 20 day moving average crossing at 4.74

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The U.S. Dollar was lower overnight as it consolidates some of last Friday's rally but remains above monthly support crossing at 75.73. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term.

If December extends this month's decline, monthly support crossing at 73.39 is the next downside target. Closes above the reaction high crossing at 77.74 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 76.80
Second resistance is the reaction high crossing at 77.74

First support is last Thursday's low crossing at 75.68
Second support is monthly support crossing at 73.39

Crude Oil Weekly Technical Outlook

Crude oil edged higher last week but momentum is so far quite unconvincing. Nevertheless, further rise is still in favor as long as 68.16 support holds. Break of 73.16 resistance will confirm 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.

In the bigger picture, medium term term outlook is quite mixed so far with crude oil still struggling around 55 weeks and 55 months EMA. The bearish case is still slightly in favor with 73.16 resistance intact. That is, medium term rebound from 44.2 has completed at 75.0 on bearish divergence conditions in daily MACD and RSI. Break of 65.05 support will solidify this case and target 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) for confirmation. However, break of 73.16 will in turn favor the case that rise from 33.2 is still in progress for another high above 75.0. Nevertheless, strong resistance should be seen in 76.77/90.24 fibonacci.....Entire article and charts!

Crude Oil Rises a Third Day on Recovery in Global Fuel Demand

Crude oil rose for a third day on speculation fuel demand will increase as the global economy emerges from recession. Oil climbed after U.S. equity markets reached their highest in a year Oct. 9, fanning hope for a recovery in world energy consumption. An Investors Business Daily survey due tomorrow in the U.S., the world’s largest energy user, may show consumers were optimistic for a third month, according to economists surveyed by Bloomberg News.

“We are looking at an international economy that is going to be stronger in 12 months’ time,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “There’s that conviction that things are going to be better down the track” even when some data is not “especially supportive,” he said. Crude oil for November delivery climbed as much as 79 cents, or 1.1 percent, to $72.56 a barrel in electronic trading on the New York Mercantile Exchange. It was at $72.23 at 9:26 a.m. Singapore time. Futures have gained 62 percent this year.....Read the entire article.

Invest AD Technical Analysis: Natural Gas May Climb to $7 Dollars

Natural gas may climb to $7 per million British thermal units after the commodity last month rebounded from a long term support level, according to Abu Dhabi-based Invest AD. Natural gas futures have almost doubled to $4.77 per million British thermal units since reaching a more than seven year low on Sept. 4. “Holding above a 20 year support and rebounding sharply from that level, signals an increase in demand for natural gas,” said Aksel Kibar, a portfolio manager at Invest AD, the investment firm owned by the Abu Dhabi Investment Council. “Any break above the $5.00-$5.50 range will push the prices toward the $6 to $7 area.”

Gas for November delivery fell 3.9 percent to $4.77 on the New York Mercantile Exchange Oct. 9. The fuel is down 15 percent this year, while crude oil is up 61 percent. “Natural gas underperformed crude oil in the last 10 years and in September the natural gas and crude oil ratio reached the lowest level in 20 years,” Kibar said. “This clearly shows an oversold condition for natural gas”.....read the entire article.

New Natural Gas ETF's on The Way

It's no surprise with the recent increase of interest in natural gas that we have more choices coming our way in the ETF arena. Jefferies is expanding their coverage of nat gas with two new funds, the Jefferies Natural Gas Equity ETF and the Jefferies Energy Wildcatters Equity ETF.

While UNG continues to be the most popular ticker, most commercial traders have focused on the FCG. And the Jefferies Natural Gas Equity ETF looks to be a direct competitor with the First Trust ISE Revere Natural Gas ETF.

The "Energy Wildcatters" ETF will focus on giving traders a way to trade a basket of small and mid cap companies in both the U.S. and Canada. All companies must have a market cap of between $200 million and $2 billion, and bring in at least 75% of their annual revenues from exploration and production of natural gas.

I for one love the nickname "wildcatters" for this fund. Let their be no mistake, this ETF does not follow the daily price of natural gas.

Here is the SEC filing for the Equity ETF and the SEC filing for the Wildcatters Fund.

Increased Natural Gas Pipeline Capacity in US Is Bad News for Canadian Natural Gas

A new natural gas pipeline in the United States is allowing cheap gas from the Rockies to displace more than 10% of Canada’s gas exports to the Midwest US, forcing more Canadian gas into storage and lowering natural gas prices for Canadian producers. The 1,679 mile, $4.4 billion Rockies Express pipeline, or REX, is providing about 1.5 billion cubic feet per day (bcf/d) of cheap gas from the Rockies through the Midwest to Ohio. The latest section of REX just opened June 29.

The new pipeline is displacing about 600 million cubic feet per day (mmcf/d) of Canadian production, says Jack Weixel, director of Energy Analysis for Bentek Energy. Bentek provides specialized energy pipeline information to clients in the oil and gas sector in North America. Weixel estimates the mid-continent corridor of pipelines send just over 5 bcf/d of gas, net, to the US from Canada (some western Canadian gas goes back into Southern Ontario via Michigan). “It has pushed off about 600 million cubic feet per day off the Northern Border Pipeline, which runs into Midwest pipelines at Ventura, Iowa,” Weixel told me over the phone from his Colorado office.....read the entire article.

Chevron Squeezes New Oil from One of World's Oldest Fields

Chevron Corp. is employing new technologies in hopes of extending the life of one of the world's oldest and most prolific oil fields, a process that is being replicated elsewhere to help the energy industry squeeze more out of aging oil basins. The Kern River field has produced more than 2 billion barrels of oil in its 110 year history, but Chevron estimates it still holds another 1.5 billion barrels.

Chevron is using the Kern River field as a real world laboratory, testing enhanced recovery techniques and bringing in engineers from around the world to learn them. "The thing about being in this old oil field," said Chevron engineer Joe Fram, "you can try stuff." To get as many of those barrels as possible out of the ground and do so cheaply enough to turn a profit Chevron is deploying high tech temperature sensors to monitor its production, using three dimensional computer models to plan its wells and filtering waste water from the fields through walnut shells so it can be re-used .....read the entire article.

The Dreaded Vote of Confidence

Oh no! The dreaded vote of confidence. You know in professional sports when your team is playing lousy and just put in a dismal performance and the owner of the team or the GM gives you a “vote of confidence” and you’re fired the next week? Well it is a good thing that the Treasury Secretary isn’t a baseball manager or he would be gone. After the dollar took another drubbing, the White House came out and said that Obama has "tremendous confidence" in Treasury Secretary Timothy Geithner right after the dollar hit an 18 month low.

Oh sure, the vote of confidence in question may not be in the US dollar but as the weakening dollar adds to inflation and increases the cost of oil and almost every commodity the average American buys, I would not feel too easy if I were Tim Geithner right now. The President has confidence in Mr. Geithner but do they have confidence in the dollar? The silence about the dollar out of the White House right now is deafening to the markets.....read the entire article.