CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed tomorrow.
Wednesday, December 16, 2009
Crude Oil Closes Higher, Above the Critical 10 Day Moving Average
Crude oil closed higher due to short covering on Wednesday and above the 10 day moving average crossing at 72.24 thereby signaling that a short term low has likely been posted. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold and are turning bullish with this week's rally signaling that sideways to higher prices are possible near term.
Closes above the 20 day moving average crossing at 74.89 are needed to confirm that a short term low has been posted. If January resumes the decline off October's high, the 87% retracement level of this fall's rally crossing at 68.16 is the next downside target.
First resistance is today's high crossing at 73.55
Second resistance is the 20 day moving average crossing at 74.89
First support is Monday's low crossing at 68.59
Second support is the 87% retracement level of this fall's rally crossing at 68.16
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Natural gas closed lower due to profit taking on Wednesday as it consolidates some of this month's rally. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term.
If January extends this month's rally, the 75% retracement level of this fall's decline crossing at 5.807 is the next upside target. Closes below the 20 day moving average crossing at 4.949 would temper the near term friendly outlook in the market.
First resistance is today's high crossing at 5.569
Second resistance is the 75% retracement level of this fall's decline crossing at 5.807
First support is the 10 day moving average crossing at 5.080
Second support is the 20 day moving average crossing at 4.949
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The U.S. Dollar closed slightly higher on Wednesday as it extends this month's rally. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.
If March extends its current rally, the reaction high crossing at 77.82 is the next upside target. Closes below the 20 day moving average crossing at 75.91 would temper the near term friendly outlook in the Dollar.
First resistance is Monday's high crossing at 77.57
Second resistance is the reaction high crossing at 77.82
First support is the 10 day moving average crossing at 76.52
Second support is the 20 day moving average crossing at 75.91
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Azlin Ahmad: Oil Demand in 2010
Azlin Ahmad, editor of crude oil at Argus Media, offers her take on what oil demand will be like in 2010, with CNBC's Chloe Cho & Rebecca Meehan.
Small Energy Firms Yielding to International Giants
Exxon Mobil Corp.'s acquisition of XTO Energy Inc. is the latest sign of a changing of the guard in the U.S. oil patch, as the small companies that led an exploration boom in the past decade start to give way to the international giants. XTO, based in Fort Worth, Texas, was one of dozens of independent producers that pioneered a revolution in the U.S. natural gas industry in recent years. While global companies like Exxon and Chevron Corp. largely stayed on the sidelines, independents like XTO, Chesapeake Energy Corp. and Devon Energy Corp. leased millions of acres of land across the U.S. in search of new sources of gas and, to a lesser extent, oil.
But pumping the gas is proving to be a lot more expensive than finding it, which has led to an increasing number of joint ventures between the independent companies and the major multinational oil players, and with the acquisition announced Monday, an outright company sale. More deals are likely, analysts say, though they suggest that it may be hard to find buyers large enough to absorb the biggest independent companies.....Read the entire article.
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Oil Extends Gain After U.S. Government Releases Supply Report
Crude oil futures extended gains after the U.S. Energy Department released its report on stockpiles. Crude oil for January delivery rose $1.49, or 2.1 percent, to $72.18 a barrel at 10:31 a.m. on the New York Mercantile Exchange. Oil traded at $71.71 before the release of the report at 10:30 a.m. in Washington.....From Bloomberg News.
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Crude Oil Higher Overnight, Hinting a Short Term Low is Near
Crude oil was higher due to short covering overnight as it consolidates some of this month's decline. Stochastics and the RSI are oversold and are turning neutral to bullish hinting that a short term low might be in or is near.
Closes above the 20 day moving average crossing at 74.82 are needed to confirm that a short term low has been posted. If January extends the decline off October's high, the 87% retracement level of this fall's rally crossing at 68.16 is the next downside target.
Wednesday's pivot point, our line in the sand is 70.38
First resistance is the 10 day moving average crossing at 72.10
Second resistance is the 20 day moving average crossing at 74.82
First support is Monday's low crossing at 68.59
Second support is the 87% retracement level of this fall's rally crossing at 68.16
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Natural gas was higher overnight as it extends last week's rally and tested the 62% retracement level of the October-December decline crossing at 5.565. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term.
If January extends this month's rally, the 75% retracement level of the October-December decline crossing at 5.807 is the next upside target. Closes below the 20 day moving average crossing at 4.953 would temper the near term bullish outlook in the market.
Natural gas pivot point for Wednesday is 5.459
First resistance is the overnight high crossing at 5.569
Second resistance is the 75% retracement level of the October-December decline crossing at 5.807
First support is the 10 day moving average crossing at 5.088
Second support is the 20 day moving average crossing at 4.953
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The U.S. Dollar was lower due to profit taking overnight as it consolidates some of this month's rally. Stochastics and the RSI are overbought but remain neutral signaling that additional gains are possible near term.
If March extends this month's rally, the reaction high crossing at 77.81 is the next upside target. Closes below the 20 day moving average crossing at 75.90 would confirm that a short term top has been posted.
First resistance is Tuesday's high crossing at 77.58
Second resistance is the reaction high crossing at 77.81
First support is the 10 day moving average crossing at 76.50
Second support is the 20 day moving average crossing at 75.90
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Closes above the 20 day moving average crossing at 74.82 are needed to confirm that a short term low has been posted. If January extends the decline off October's high, the 87% retracement level of this fall's rally crossing at 68.16 is the next downside target.
Wednesday's pivot point, our line in the sand is 70.38
First resistance is the 10 day moving average crossing at 72.10
Second resistance is the 20 day moving average crossing at 74.82
First support is Monday's low crossing at 68.59
Second support is the 87% retracement level of this fall's rally crossing at 68.16
Just click here for your FREE trend analysis of USO
Natural gas was higher overnight as it extends last week's rally and tested the 62% retracement level of the October-December decline crossing at 5.565. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term.
If January extends this month's rally, the 75% retracement level of the October-December decline crossing at 5.807 is the next upside target. Closes below the 20 day moving average crossing at 4.953 would temper the near term bullish outlook in the market.
Natural gas pivot point for Wednesday is 5.459
First resistance is the overnight high crossing at 5.569
Second resistance is the 75% retracement level of the October-December decline crossing at 5.807
First support is the 10 day moving average crossing at 5.088
Second support is the 20 day moving average crossing at 4.953
Just click here for your FREE trend analysis of UNG
The U.S. Dollar was lower due to profit taking overnight as it consolidates some of this month's rally. Stochastics and the RSI are overbought but remain neutral signaling that additional gains are possible near term.
If March extends this month's rally, the reaction high crossing at 77.81 is the next upside target. Closes below the 20 day moving average crossing at 75.90 would confirm that a short term top has been posted.
First resistance is Tuesday's high crossing at 77.58
Second resistance is the reaction high crossing at 77.81
First support is the 10 day moving average crossing at 76.50
Second support is the 20 day moving average crossing at 75.90
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Crude Oil and Natural Gas Technical Outlook For Wednesday Morning
Nymex Crude Oil (CL)
Crude oil's break of 71.35 resistance suggests that a short term bottom is in place and stronger rebound should now be seen towards 38.2% retracement of 82.0 to 68.58 at 73.71 and possibly above. Nevertheless, upside should be limited by 61.8% retracement at 76.87 and bring fall resumption. Below 68.58 will target 65.05 key support next.
In the bigger picture, we're favoring the case that medium term rise from 33.2 has completed at 82.0 with bearish divergence condition in daily MACD. The break of medium term trend line support last week affirms this case and should pave the way to 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation. As noted before, rise from 33.2 is treated as part of the correction pattern that started at 147.27. Firmed break of 58.32 support will argue that the down trend from 147.27 might be resuming for another low below 33.2. On the upside, break of 79.04 resistance is needed to invalidate this view, otherwise, outlook will remain bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Nymex Natural Gas (NG)
Natural gas's rally extends further as expected and reaches as high as 5.569 so far. At this point, intraday bias remains on the upside as long as 5.37 minor support holds and further rise should be seen to 61.8% projection of 2.409 to 5.318 from 4.157 at 5.955 next. On the downside, below 5.37 minor support will turn intraday bias neutral and bring retreat, probably to 4 hours 55 EMA (now at 5.159). Nevertheless, downside should be contained above 4.837 support and bring rally resumption.
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 and might have completed at 2.409 already. Rise from 2.409 resumes as expected after consolidations from 5.318 completed. Current rally should now be targeting 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Break of 4.432 support is needed to indicate that natural gas has topped. Otherwise, outlook will remain bullish.....Nymex Natural Gas Continuous Contract 4 Hours Chart.
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Tuesday, December 15, 2009
Crude Oil and Natural Gas Commentary For Tuesday Evening
Crude oil closed higher due to short covering on Tuesday as it consolidated some of this month's decline. The high range close sets the stage for a steady to higher opening on Wednesday.
If January extends the decline off October's high, the 87% retracement level of this fall's rally crossing at 68.16 is the next downside target. Closes above the 20 day moving average crossing at 75.24 are needed to confirm that a short term low has been posted.
First resistance is the 10 day moving average crossing at 72.63
Second resistance is the 20 day moving average crossing at 75.24
First support is Monday's low crossing at 68.59
Second support is the 87% retracement level of this fall's rally crossing at 68.16
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Natural gas closed higher on Tuesday as it extends this month's rally. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.
If January extends this month's rally, the 62% retracement level of this fall's decline crossing at 5.565 is the next upside target. Closes below the 20 day moving average crossing at 4.922 would temper the near term friendly outlook in the market.
First resistance is today's high crossing at 5.530
Second resistance is the 62% retracement level of this fall's decline crossing at 5.565
First support is the 10 day moving average crossing at 4.987
Second support is the 20 day moving average crossing at 4.922
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The U.S. Dollar closed higher on Tuesday as it extends this month's rally. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.
If March extends its current rally, the reaction high crossing at 77.82 is the next upside target. Closes below the 20 day moving average crossing at 75.83 would temper the near term friendly outlook in the Dollar.
First resistance is today's high crossing at 77.57
Second resistance is the reaction high crossing at 77.82
First support is the 10 day moving average crossing at 76.30
Second support is the 20 day moving average crossing at 75.83
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Oil Rises, Snaps 9 Day Drop as U.S. Industrial Output Gains
Oil rose, snapping the longest decline since 2001, on a report that U.S. factories churned out more goods in November than anticipated, a signal that fuel demand will increase. Oil gained for the first time in 10 days as the Federal Reserve said that output at factories, mines and utilities climbed 0.8 percent last month, the fourth increase in five months. Germany’s IFO economic institute raised its 2010 outlook for growth in Europe’s biggest economy.
“The industrial production number is definitely a sign that the economy is improving, and it should lead to higher demand for oil and energy,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. Crude oil for January delivery rose $1.18, or 1.7 percent, to settle at $70.69 a barrel on the New York Mercantile Exchange. Futures have climbed 58 percent this year. Oil dropped 11 percent in the nine days ended yesterday to the lowest level since Sept. 29.....Read the entire article.
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