Oil Rises After Report Shows Unexpected Drop in Gasoline Supply

Crude oil futures rose after a U.S. government report showed an unexpected decline in supplies of gasoline. Gasoline inventories dropped 5.23 million barrels to 209.2 million in the week ended Oct. 9, the Energy Department said today in a weekly report. Stockpiles were forecast to increase by 1.13 million, according to the median of analyst estimates in a Bloomberg News survey.

Inventories of crude oil rose 334,000 barrels to 337.8 million, the department said. Supplies were forecast to increase by 1 million barrels. Crude oil for November delivery increased 76 cents, or 1 percent, to $75.94 a barrel at 11:07 a.m. on the New York Mercantile Exchange. Oil traded at $75.26 a barrel before the release of the report at 11 a.m. in Washington.....read the entire article.

Crude Oil and Natural Gas Daily Technical Outlook

Nymex Crude Oil (CL)

Crude oil's rally extends to as high as 75.96 so far and intraday bias remains on the upside for the moment. Current rise is still expected to continue to 38.2% of 147.27 to 33.2 at 76.77 and break will target 80 psychological level next. On the downside, below 74.64 will turn intraday outlook neutral and bring retreat but downside should be contained by 70.74 support and bring rally resumption.

In the bigger picture, medium term rise from 33.2 is still in progress and could extend further. Nevertheless, strong resistance should be seen in 76.77/90.24 fibo resistance zone (38.2% and 50% retracement of 147.27 to 33.2) to conclude the medium term rise finally. On the downside, in case of pull back, break of 65.05 is needed to indicate that crude oil has topped out. Otherwise, further rise is still in favor.....crude oil charts.

Nymex Natural Gas (NG)

Natural gas' retreat from 5.12 is still in progress and intraday bias remains neutral for the moment. Some more consolidation could be seen but after all, short term outlook will remain bullish as long as 4.351 minor support holds. Above 5.120 will bring resumption of whole rise form 2.409 and should target 38.2% retracement of 13.64 to 2.409 at 6.7 next. However, considering bearish divergence condition in 4 hours MACD, break of 4.351 will indicate that a short term top is formed and will bring deeper pull back instead.

In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005. The whole consolidation might have completed at 2.409 after meeting 100% projection of 15.78 to 4.593 from 13.69 at 2.50. We'll prefer the bullish case as long 55 days EMA (now at 3.94 holds) and expect the current rise from 2.409 to extend further to 61.8% retracement of 13.64 to 2.409 at 9.38 in medium term.....Natural Gas Charts.

Mid-Week UNG & USO Trading Charts

Commodities and stocks have been on fire the past two weeks and I think it just may be time for things to take a breather. While I continue to stay long, taking some money off the table to lock in profits is a safe play.

Just from a quick glance at the charts we can tell the odds are pointing to some type of pause or pullback in the coming days. I figure any day now we could see some profit taking.

Natural Gas ETF Trading – UNG
The Natural Gas ETF sure has given everyone a wild ride in the past 6 months. The bear market is still in place which can be seen on the daily chart. So far this week the price has broken down and trading at the $11 support level. This fund could generate a buy or sell signal with my trading model in the coming days so I am waiting for a clear entry and exit point before jumping on the gas wagon.


Crude Oil ETF Trading – USO
The Crude Oil ETF has broken above its resistance trend line this week but still struggling to move above the August high. Volume is declining while the price rises which is a bearish indicator. USO looks ready for some type of a pullback as it digests this breakout before moving higher.


Mid-Week ETF Trading Report
What does the general public hear and think about the stock market?
From recent emails, local financial news shows, family, friends etc… all I am hearing is how strong the market is. Indexes are making new yearly highs and company earnings are better than expected this quarter. Sounds like all we need to do is buy and life will be great!

Well in my opinion the market is the perfect tool for misguiding and frustrating the general public. All my indicators are telling me we need more of a correction before rallying much higher. The market (smart money) generally anticipates good and bad news several weeks if not a month in advance. So the question is:

Are company earnings already priced into the market?

Is all this positive market coverage getting the general public to buy up here at this possible market top? The answer is, only time will tell. No one knows for sure what the market is going to do but short term moves can be predicted with relatively high accuracy.

Don’t get me wrong, I am still bullish on the market but with all this good news becoming public information you have to wonder what is next. I am still long the market but trimming my positions to lock in profits and still stay in the game.

If you would like to receive Chris Vermeulen's free weekly trading analysis please visit his trading website The Gold and Oil Guy.

Oil Closes Near Session High, Hits New Seven Week High

Crude oil closed up $1.05 at $75.20 a barrel today. Prices closed nearer the session high today and hit a fresh seven week high. A lower U.S. dollar boosted crude oil again today. Crude bulls have the solid overall near term technical advantage. Prices are in a three week old uptrend on the daily bar chart.

Natural gas closed down 14.2 cents at $4.446 today. Prices again closed nearer the session low today. Bulls faded again today and need to show fresh power soon. The next upside price objective for the bulls is closing prices above solid technical resistance at the August high of $5.133.

Heating oil closed up 192 points at $1.9426 today. Prices closed nearer the session high today and hit another fresh six week high. Bulls have the near term technical advantage.

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Unleaded gasoline (RBOB) closed up 266 points at $1.8584 today. Prices closed nearer the session high today and hit a fresh four week high. Bulls have the near term technical advantage. The next upside price objective for the bulls is closing prices above solid technical resistance at the September high of $1.8736.

The U.S. dollar index closed down 54 points at 75.63 today. Prices closed nearer the session low today and hit another fresh contract low. Same story: Bears still have the solid overall near term technical advantage. Bulls' next upside price objective is to close prices above solid technical resistance at 78.00.

Deciphering Current Natural Gas Market Data

In the last six weeks natural gas futures prices have jumped from a modern day low to nearly $5 per thousand cubic foot (Mcf) as commodity traders and investors started to cover their short positions in this fuel as the days moved closer to the beginning of the winter heating season. The jump in the gas price ends what has been an extended price slide that started back in summer of 2008 when prices were in excess of $13 per Mcf and early signs of the developing global recession emerged.

The jump in the gas price ends what has been an extended price slide that started back in summer of 2008....


The traders and investors who have been covering their negative bets on natural gas prices have been motivated by signs the nascent U.S. economic recovery is gathering strength, especially among sectors such as automobiles and home construction that are large consumers of natural gas and its components as feedstocks for petrochemical materials. Additionally, there.....read the entire article.

New Video: Where is Crude Oil Headed and How Will it Effect The Market

No surprise, interest in crude oil has spiked this week. And part of that may have come from the crude oil alert that we put here on our blog on October 12.

What is interesting about crude oil is the fact that seasonally, it should be going down. However, the market appears to be doing just the opposite. We have written about this before and when something is supposed to happen and the opposite occurs, it’s time to pay attention.

What was also interesting in crude oil is the fact that all of our “Trade Triangles” are all green giving a perfect 100% Chart Analysis score. This indicates that there are some strong trends in place and the odds are that the market should go higher. However, this is not a guarantee and all trades should be managed with stops.

In our new short video, we show some levels that crude oil could potentially go to. I also indicate a key level that many professional traders are watching and if this level is broken, it will certainly be a game changer that could effect the markets.

Just Click Here to watch the new video, and as always this video is free to view and there are no registration requirements. The one request we have is that you leave a comment about your thoughts on crude oil.

Bloomberg, Jakob Says: Oil’s Rally May Halt at $78.40

Crude oil’s rise beyond the one year high reached today may be checked by a resistance level first encountered three years ago, according to technical analysis by consultants Petromatrix GmbH. Crude climbed to $75.15 a barrel in New York today, its highest price since last October. The rally may dissipate as it approaches $78.40, the highest price reached in 2006, the energy consultant said. The likelihood of crude breaking this threshold will be determined by movements in the U.S. dollar, it added.

“This stands out as the next resistance level,” Petromatrix Managing Director Olivier Jakob said in an interview from Zug, Switzerland. “It was the high in 2006, and also strong resistance in 2007. When it was broken in 2007, crude moved to the next level, which was $100.” Oil rose to a then record of $78.40 a barrel on July 14, 2006 as conflict between Israel and Hezbollah stoked concern Middle East crude exports might be disrupted. In 2007, seven months of price gains snapped after oil reached $78.77 on Aug. 1, and the commodity lost about $9 during the rest of that month before resuming its upward path.....read the entire article.

Crude Oil and Natural Gas Technical Outlook For Wednesday Morning

Nymex Crude Oil (CL)
Crude oil rises further to as high as 75.15 today and the break of 75.0 confirms that whole medium term rise has resumed. Intraday bias remains on the upside for 38.2% of 147.27 to 33.2 at 76.77 next. On the downside, below 72.84 minor support will turn intraday outlook neutral and bring consolidation first. But downside should be contained above 68.08 support and bring rise resumption.

In the bigger picture, medium term rise from 33.2 is still in progress and could extend further. Nevertheless, strong resistance should be seen in 76.77/90.24 fibo resistance zone (38.2% and 50% retracement of 147.27 to 33.2) to conclude the medium term rise finally. On the downside, in case of pull back, break of 65.05 is needed to indicate that crude oil has topped out. Otherwise, further rise is still in favor.
.....Crude oil charts.

Nymex Natural Gas (NG)
Natural gas' retreat from 5.12 is still in progress and intraday bias remains neutral for the moment. Some more consolidation could be seen but after all, short term outlook will remain bullish as long as 4.351 minor support holds. Above 5.120 will bring resumption of whole rise form 2.409 and should target 38.2% retracement of 13.64 to 2.409 at 6.7 next. However, considering bearish divergence condition in 4 hours MACD, break of 4.351 will indicate that a short term top is formed and will bring deeper pull back instead.

In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005. The whole consolidation might have completed at 2.409 after meeting 100% projection of 15.78 to 4.593 from 13.69 at 2.50. We'll prefer the bullish case as long 55 days EMA (now at 3.842 holds) and expect the current rise from 2.409 to extend further to 61.8% retracement of 13.64 to 2.409 at 9.38 in medium term.....Natural gas charts.

Oil Rises Fifth Day to Near $75 as OPEC Raises Demand Forecast

Crude oil rose for a fifth day, trading near $75 a barrel in New York, after OPEC increased its world energy demand forecast and the weaker dollar boosted the the appeal of commodities. Oil gained 1.2 percent yesterday as the Organization of Petroleum Exporting Countries raised its 2010 global oil consumption estimate on expansion in emerging economies. The International Energy Agency last week upgraded its demand prediction. Crude also climbed as the dollar fell to the lowest against the euro since August 2008.

“OPEC revised up its global oil consumption forecast for 2010 and that comes on the back of the IEA revising up their forecast,” said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne. “It is further fueling the sentiment that the demand outlook is better than what a lot of people are expecting.” Crude oil for November delivery gained as much as 81 cents, or 1.1 percent, to $74.96 a barrel in electronic trading on the New York Mercantile Exchange, and traded at $74.77 at 9:27 a.m. Singapore time. Prices last reached $75 on Aug. 25, the highest since October.....read the entire article.

Crude Oil: Is A Breakthrough or Breakdown Coming?

Over the last three months, crude oil prices have acted like a dog with a shock collar around its neck. One minute it's barreling up a hill at warp speed straight for the mailman at the top of the driveway. And then...... ZAP! It's jolted by an invisible electric fence and sent scampering right back down to the place it started. Talking numbers: the market has been range bound between $75 and $65 per barrel.

Which begs the question: Who controls the collar? According to the mainstream experts, oil prices are in a classic holding cell created when two opposing fundamentals reached a standstill. Here, the following October 9 Wall Street Journal explains: "Crude Torn... the market is unsure whether oil is a commodity that should be influenced by supply and demand, or whether it's an asset class that is determined by equities and currencies."

If the former, then energy prices should turn down: U.S. distillates stocks are at a 23 year high, while 2009 demand figures show a CONTRACTION of 1.7 million barrels a day. If the latter, energy should rise alongside a rallying stock market and falling U.S. dollar. Problem is, there's no way of knowing which "IF" applies until AFTER prices break out in a meaningful trend. And even then, the fundamental lines are a blur.....read the entire article and charts.