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Crude oil fell for the first time in four days as the dollar gained against the euro, dulling the appeal of commodities as a currency hedge. Oil fell after reaching a one week high yesterday as the U.S. Department of Energy said crude stockpiles dropped unexpectedly last week. Stock markets fell today across Europe on concern that this year’s rally has outpaced the prospects for economic growth.
“When the dollar is strong and equities are lower, then the oil market goes lower too,” Frank Schallenberger, head of commodities research at Landesbank Baden-Wuerttemberg, said by phone from Stuttgart. “It’s unusual to be stuck so long in a range” between $75 and $80. Crude oil for December delivery dropped as much as 82 cents, or 1 percent, to $78.76 a barrel in electronic trading on the New York Mercantile Exchange and traded at $79.22 a barrel at 2:05 p.m. London time. The contract expires tomorrow.....Read the entire article.
So far this week has been generous with our commodity ETFs moving higher, other than natural gas which is clearly in a bear market. Each of the commodity ETF trading charts below is at a different stage and it will be interesting to see how things unfold in the coming weeks.
Trading ETFs is very rewarding when done properly and using multiple time frames for timing your entry and exit points is crucial. My main focus is on the weekly and daily charts but I use a 30 minute intraday chart when the time comes to actually pick an exact buy or sell point. Below I have provided both the weekly and daily chart so you can see how the same ETF looks completely different on the two time frames.
USO Fund Trading – Weekly & Daily Trading Charts While gold and silver have been moving higher oil has been flagging sideways taking a breather. Both the weekly and the daily charts are aligned for a nice move higher if the trend and charts follow through on their patterns. We could get some tradable action in the next couple days.
UNG Fund Trading – Weekly & Daily Trading Charts Natural gas is really starting to slide. Wednesday UNG dipped below the Sept low of $8.94 by a couple cents then moved up into the close. Overall it’s not bullish. This could be the start of a waterfall sell off which is a sharp heavy volume sell off that lasts 3-5 days.
Commodity ETF Trading Conclusion: To sum everything up the gold and silver ETFs are on fire as they continue to surge higher. Being ready for a sharp reversal is important if you want to lock in gains on a portion of your position.
Crude oil is taking its time but looking ripe for a breakout higher. We continue to watch for some action.
Natural gas continues to get pushed down and it’s not looking good for higher prices anytime soon. We are waiting for a shorting opportunity or an oversold condition to play a 1-5 day bounce.
Quick Trading Tip: If you have a position which has done well and has moved up for an extended period of time be sure to draw some trend lines and tighten your stop, or set a stop, under a tight trend line. Sell some of your position (25-50%) to lock in gains and let the core position continue to mature. If you get a pullback to a support level (previous breakout level) you can buy back your other part of your position at a lower price.
Crude oil closed up $0.49 at $79.63 a barrel today. Prices closed near mid range again today. A weaker U.S. dollar supported buying interest in crude today. Crude oil bulls have the near term technical advantage in crude oil. The next downside price objective for the crude oil bears is to produce a close below solid technical support at last week's low of $75.57.
Natural gas closed down 26.9 cents at $4.26 today. Prices closed near the session low and hit a fresh contract low today. Serious near term chart damage has occurred recently, including more today. Bears have the solid near term technical advantage.
Unleaded gasoline (RBOB) closed up 100 points at $2.0149 today. Prices closed nearer the session low today. Bulls still have the near term technical advantage. The next upside price objective for the bulls is closing prices above solid technical resistance at the October high of $2.1015.
The U.S. dollar index closed down 29 points at 75.17 today. Prices closed near mid range today. Bears still have the solid overall near term technical advantage, amid no early clues of a market bottom being close at hand. Bulls' next upside price objective is to close prices above solid technical resistance at 77.00.
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Oil rose above $80 a barrel after the government reported that U.S. crude and fuel supplies dropped as refineries idled units and imports declined. Oil inventories dropped 887,000 barrels to 336.8 million last week, the Energy Department said. Stockpiles were forecast to increase by 300,000 barrels, according a Bloomberg News survey of analysts. Inventories of gasoline and distillate fuel, a category that includes heating oil and diesel, also declined.
“There were draws in crude oil, gasoline and distillates, so the initial numbers looked very bullish,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. Crude oil for December delivery rose 43 cents, or 0.5 percent, to $79.57 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures have traded between $74.79 and $82 since Oct. 15. Prices are up 78 percent this year.....Read the entire article.
U.S. crude oil refinery inputs averaged 13.8 million barrels per day during the week ending November 13, 31 thousand barrels per day below the previous week’s average. Refineries operated at 79 percent of their operable capacity last week. Gasoline production increased last week, averaging 9.1 million barrels per day. Distillate fuel production decreased last week, averaging 4.0 million barrels per day. U.S. crude oil imports averaged 8.6 million barrels per day last week, down 77 thousand barrels per day from the previous week.
Over the last four weeks, crude oil imports have averaged 8.6 million barrels per day, 1.5 million 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 584 thousand barrels per day. Distillate fuel imports averaged 152 thousand barrels per day last week. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 0.9 million barrels from the previous week. At 336.8 million barrels, U.S. crude oil inventories are slightly above the upper limit of the average range for this time of year.
Total motor gasoline inventories decreased by 1.7 million barrels last week, and are above the upper limit of the average range. Finished gasoline inventories increased while blending components decreased last week. Distillate fuel inventories decreased by 0.3 million barrels, and are above the upper boundary of the average range for this time of year.....Read the entire report.
Energy forecasters increasingly predict slowing growth in global oil demand in the years ahead, but some OPEC nations are heading in the opposite direction and ramping up their capacity to pump oil. Qatar, for example, is set to raise its oil production capacity early next year from an existing field known as Al Shaheen. The more than $6 billion expansion project brightens the revenue prospects of the Mideast state but highlights a bigger problem brewing for its partners in the Organization of Petroleum Exporting Countries.
After keeping a tight tether on supply in recent years by cautiously investing, the 12 nation cartel finds itself battling an untimely convergence of lackluster consumption that magnifies its own rising supply capacity, which may in turn reignite old battles between members over market share and ultimately push oil prices lower.....Read the entire article.
Crude oil closed up $0.21 at $79.11 a barrel today. Prices closed near mid range today. A stronger U.S. dollar limited buying interest in crude today. Bulls have the near term technical advantage in crude oil. The next downside price objective for the crude oil bears is to produce a close below solid technical support at last week's low of $75.57.
Natural gas closed down 7.3 cents at $4.541 today. Prices closed nearer the session low. Serious near term chart damage has occurred recently. Bears have the solid near term technical advantage. The next upside price objective for the bulls is closing prices above solid technical resistance at $5.00.
The U.S. dollar index closed up 47 points at 75.39 today. Prices closed near mid range today and were supported on tepid short covering in a bear market. Bears still have the solid overall near term technical advantage. Bulls' next upside price objective is to close prices above solid technical resistance at 77.00.
Global oil productive capacity will grow though 2030 with no evidence of a peak of supply before that time, according to a new report by IHS Cambridge Energy Research Associates based on analysis of more than 10,000 projects around the globe. The report, The Future of Global Oil Supply: Understanding the Building Blocks extends IHS CERA's global oil outlook through 2030 and expects global oil productive capacity to grow to as much as 115 million barrels per day (mbd) through that period from the current level of 92 mbd, a 25 percent increase. Post 2030 supply could struggle to meet demand but this would take the form of a decades long "undulating plateau" rather than a sharp fall, the report says.
"There is more than an adequate inventory of physical resources available to increase supply to meet anticipated levels of demand through 2030," said Peter Jackson. "It would be easy to interpret the market and oil price trends from 2003 through 2009 in isolation to support the belief that a peak in global supply has passed or is imminent. But this only illustrates that the market continues to act as the shock absorber of major volatility".....Read the entire article.
Crude oil rose in New York as the dollar climbed and before a report that will probably show that U.S. fuel supplies declined. Oil rebounded after slipping as much as 1 percent as the U.S. currency rose against the euro for the first time in three days. An Energy Department report tomorrow will probably show that supplies of gasoline and distillate fuel, a category that includes heating oil and diesel, declined last week, according to a Bloomberg News survey.
“Everything we have been seeing can be pegged to what’s happening in the equities and the dollar,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. Attention is now shifting to the weekly supply reports, he said. Crude oil for December delivery rose 31 cents to $79.21 a barrel at 12:24 p.m. on the New York Mercantile Exchange after dropping as low as $78.14. Prices are up 78 percent this year.....Read the entire post.
