Weekly EIA Crude Oil Inventory Report

Summary of Weekly Petroleum Data for the Week Ending October 16, 2009

U.S. crude oil refinery inputs averaged 14.1 million barrels per day during the
week ending October 16, 27 thousand barrels per day under the previous week's
average. Refineries operated at 81.1 percent of their operable capacity last
week. Gasoline production was virtually unchanged last week, averaging 8.5
million barrels per day. Distillate fuel production increased slightly last
week, averaging 3.9 million barrels per day.

U.S. crude oil imports averaged 8.7 million barrels per day last week, down 32
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 9.0 million barrels per day, 310 thousand
barrels per day below the same four week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged 649 thousand barrels per day. Distillate fuel imports
averaged 120 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 1.3 million barrels from the previous week. At
339.1 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
decreased by 2.3 million barrels last week, and are near the upper limit of the
average range. Finished gasoline inventories decreased while blending
components increased last week. Distillate fuel inventories decreased by 0.8
million barrels, and are above the upper boundary of the average range for this
time of year. Propane/propylene inventories decreased by 1.4 million barrels
last week and are at the upper limit of the average range. Total commercial
petroleum inventories decreased by 4.2 million barrels last week, and are above
the upper limit of the average range for this time of year.

Total products supplied over the last four week period has averaged 18.8
million barrels per day, down by 0.1 percent compared to the similar period
last year. Over the last four weeks, motor gasoline demand has averaged about
9.2 million barrels per day, up by 4.2 percent from the same period last year.
Distillate fuel demand has averaged 3.5 million barrels per day over the last
four weeks, down by 12.1 percent from the same period last year. Jet fuel
demand is 3.2 percent lower over the last four weeks compared to the same
four week period last year.

Crude Oil Lower on Profit Taking, Euro Weakness

Crude oil was lower due to profit taking overnight as it consolidates some of this month's rally. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near.

While the Euro was slightly higher overnight day traders are looking at bearish set ups in the Euro with a possibility of trading as low as 148.34 putting additional pressure on crude oil.

If December extends this rally, weekly resistance crossing at 84.83 is the next upside target. Closes below the 20 day moving average crossing at 72.69 would confirm that a short term top has been posted.

Wednesday's pivot point, our line in the sand is 79.12

First resistance is Tuesday's high crossing at 80.40
Second resistance is weekly resistance crossing at 84.83

First support is the 10 day moving average crossing at 76.27
Second support is the 20 day moving average crossing at 72.69

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Natural gas was lower due to profit taking overnight as it consolidates some of the rally off last Thursday's low. Stochastics and the RSI are diverging but remain bullish signaling that sideways to higher prices are possible near term.

If December extends this rally, June's high crossing at 6.170 then the 25% retracement level of the 2008-2009 decline crossing at 6.450 are the next upside targets. Closes below the reaction low crossing at 5.200 are needed to confirm that a short term top has been posted.

Natural gas pivot point for Wednesday is 5.077

First resistance is the overnight high crossing at 5.989
Second resistance is June's high crossing at 6.170

First support is the 20 day moving average crossing at 5.634
Second support is last Thursday's low crossing at 5.280

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The U.S. Dollar was lower overnight as it extends last week's decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.

If December extends this year's decline, monthly support crossing at 73.39 is the next downside target. Closes above the 20 day moving average crossing at 76.47 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 75.91
Second resistance is the 20 day moving average crossing at 76.47

First support is Monday's low crossing at 75.25
Second support is monthly support crossing at 73.39

Oil Falls From a One Year High as Stocks Decline, Dollar Climbs

Crude oil fell from a one year high as U.S. equities dropped and the dollar rebounded, reducing the appeal of commodities as an alternative investment. Oil declined for the first time in nine days as a disappointing report on housing starts overshadowed better than estimated earnings at companies from Apple Inc. to Pfizer Inc. Futures traded above $80 early today as the Dollar Index, which measures the greenback against six major currencies, weakened to its lowest level since August 2008.

“Oil is mainly taking its cue from what’s happening in the financial markets,” said Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois, consultant. “This shouldn’t be too much of a surprise after the good run we’ve had to the upside.” Crude oil for November delivery fell 81 cents, or 1 percent, to $78.80 a barrel at 10:39 a.m. on the New York Mercantile Exchange. Earlier, prices rose as much as 0.6 percent to $80.05 a barrel, the first time the front-month contract has traded above $80 since Oct. 14, 2008. Futures are heading for the biggest drop since Oct. 7. The November contract expires today. More active December futures declined 84 cents.....Read the entire article.

Bloomberg Analysis: Oil Breaks Resistance, May Climb to $90

Crude oil has breached a key resistance level of $76.28 a barrel, giving it the “capacity” to rise to just under $90 based on Fibonacci retracements, Australia & New Zealand Banking Group Ltd. said. Oil, which is trading near a one year high in New York, is “taking a pause” to consolidate before moving up toward $89.85 a barrel, said Geoff Clear, the Singapore based head of Asian commodities at ANZ.

“We saw a break above $76.28 a barrel, that was the big ‘break up’ level,” Clear said. “We’re in a new range.” Crude prices have surged 83 percent since March 5 while the Dollar Index, which tracks the currency against those of six major U.S. trading partners, has fallen 16 percent since then. The sliding U.S. dollar and a recovery in equity markets prompted investors to buy commodities as an inflation hedge.

Crude may encounter its next resistance level at $83.60, according to Clear. “If we start to get close to the $83.60 level, it’s the next targeted Fibonacci retracement that I can see in the market,” Clear said. “Prices will do a bit of work below $83.60 initially, and then we’ll go on from there”.....Read the entire article.

ALERT: Daily Trade Triangle Buy Signal For Spot Gold

The MarketClub "Trade Triangle" technology has flashed a buy signal on Spot Gold this evening at $1,065.53.

To learn more about Trade Triangle alerts just visit the MarketClub.

Are You Laughing or Crying About The Markets?

There’s no question about it, the markets can be very difficult at times. On the other hand, you can laugh all the way to the bank if you approach the markets in a systematic way.

I was looking once again at the S&P 500 and many people have said the market has gone up, not on the fundamentals, but on the perception that things are going to be better. Perception is one of the most powerful elements of the market. I would say that perception trumps both the fundamental and technical.

So what’s going to happen to the S&P 500? Is it going to continue going higher for the rest of the year, or are we close to a turning point?

In our new short video, we outline several key areas that this market is fast approaching. These levels could be the Achilles heel for this market and potentially set the direction for the rest of the year.

Just Click Here to watch the video and as always, the videos are free to watch and there is no need to register.

Please take a minute to leave a comment and let us know what you think of the video and the direction of the SP 500.

Phil Flynn's Energy Report: Dollars Deficits and Oil

A breakout in oil and what do you get, another day older and deeper in debt, like about 1.42 trillion dollars deep. Now it does not get much deeper than that. The US Budget deficit screams while politicians fight over ways to spend more money and the dollar loses ground and respect. 1.42 trillion dollars and the oil bulls continues to breathe easy up in this new atmosphere as a breakout to the upside has the bulls firmly in control.

Just how much is 1.42 trillion dollars? Bloomberg News reports that $1.42 trillion is more than the total national debt for the first 200 years of the Republic, more than the entire economy of India, almost as much as Canada's, and more than $4,700 for every man, woman and child in the United States. Is it any wonder why the Canadian dollar is almost trading at par with the dollar? The Federal budget deficit for 2009, more than three times the most red ink ever amassed and the highest as a perercentage of GDP since the Second World War.....Read the entire article.

Crude Oil Rises to One Year High Above $79 as Equities Increase

Crude oil rose to a one year high as advancing global equities bolstered confidence that an economic recovery will lift fuel consumption. Oil topped $79 a barrel, extending its longest winning streak in two years, as U.S. stocks increased, contributing to an advance in equities from Shanghai to London. The dollar weakened, boosting the appeal of commodities as an alternative investment. “As long as the dollar stays down and equities stay up, that’s a good enough reason to buy crude,” said Brad Samples, a commodity analyst for Summit Energy Inc. in Louisville, Kentucky.

Crude oil for November delivery rose 28 cents, or 0.4 percent, to $78.81 a barrel at 11:45 a.m. on the New York Mercantile Exchange. Earlier, prices touched $79.05 a barrel, the highest level since Oct. 15, 2008. The November contract expires tomorrow. The more widely held December contract added 18 cents to $79.20 a barrel. The Standard & Poor’s 500 Index rose 0.9 percent to 1,097.84 and the Dow Jones Industrial Average climbed 100.67 points, or 1 percent, to 10,096.58 at 11:46 a.m. in New York.....read the entire article.

Crude Oil Rises for Eighth Day on Speculation Demand Recovering

Crude oil climbed above $79 a barrel in New York for the first time in a year, rising for an eighth day on speculation demand will increase as the global economy recovers from recession. A report today may show confidence among home builders in the U.S., the world’s largest oil consumer, is at its highest in 17 months, according to economists surveyed by Bloomberg News. There is no shortage of oil and OPEC won’t increase output to quell price gains driven by speculators, Secretary General Abdalla El-Badri told the Wall Street Journal on Oct. 16.

“The economic numbers are looking better and a lot of that seems to have already been priced in,” said Ben Westmore, energy and minerals economist at National Australia Bank Ltd. in Melbourne. “There is still a big question mark over how much of that, especially in the U.S. and China, is being driven by the stimulus packages.”
Crude oil for November delivery rose as much as 52 cents, or 0.7 percent, to $79.05 a barrel in after hours electronic trading on the New York Mercantile Exchange, the highest since Oct. 15 2008.....Read the entire article.

USO and UNG Technical Analysis with Idan Koren

From guest analyst Idan Koren....

Today we look at the USO and UNG and try to decipher where they are headed and what possible trades could be on the table. We believe that the USO is the reason why the S&P remains up while other stocks have potentially topped already.