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 23, 2009
Crude Oil Bulls Gain Fresh Near Term Momentum
Crude oil closed up $2.10 at $76.50 a barrel today. Prices closed nearer the session high and hit a fresh two week high today. Crude was supported by a weaker U.S. dollar and firmer U.S. stock index prices today. Bulls today gained fresh upside near term technical momentum.
Natural gas closed up 11.7 cents at $5.889 today. Prices closed near the session high and closed at a fresh two month high close today. Bulls have gained upside near term technical momentum recently. Prices are in a steep three week old uptrend on the daily bar chart.
Heating oil closed up 570 points at $2.0270 today. Prices closed nearer the session high today and scored a fresh two week high. Bulls gained some fresh upside near term technical momentum today. The bulls' next upside price objective is closing prices above solid technical resistance at $2.1000.
Unleaded gasoline (RBOB) closed up 644 points at $1.9770 today. Prices closed nearer the session high today and hit a fresh two week high. Bulls gained some fresh upside technical momentum today. The next upside price objective for the bulls is closing prices above solid technical resistance at $2.0500.
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Natural gas closed up 11.7 cents at $5.889 today. Prices closed near the session high and closed at a fresh two month high close today. Bulls have gained upside near term technical momentum recently. Prices are in a steep three week old uptrend on the daily bar chart.
Heating oil closed up 570 points at $2.0270 today. Prices closed nearer the session high today and scored a fresh two week high. Bulls gained some fresh upside near term technical momentum today. The bulls' next upside price objective is closing prices above solid technical resistance at $2.1000.
Unleaded gasoline (RBOB) closed up 644 points at $1.9770 today. Prices closed nearer the session high today and hit a fresh two week high. Bulls gained some fresh upside technical momentum today. The next upside price objective for the bulls is closing prices above solid technical resistance at $2.0500.
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Oil Inventories Saw Huge Declines Across the Board
The inventory report by the US Energy Department surprised the market as crude inventory fell -4.84 mmb to 327.5 mmb in the week ended December 18. The draw was significantly more than market expectation and represented the third consecutive decline. Although stockpile at Cushing, Oklahoma rose +0.57 mmb, the pace of increase has moderated and should narrow the discount of WTI crude to Brent crude.
Distillate stockpile declined -3.03 mmb, following a -2.95 mmb draw in the prior week. This is the second consecutive weekly fall. The market anticipates further draw in coming weeks as the weather gets abnormally cold. Gasoline inventory dipped -0.88 mmb to 216.3 mmb, offsetting the build in the previous week.
Rally in crude oil price accelerated after the report. The benchmark contract surged to 76.53, the highest in 3 weeks. For oil products, heating oil price jumped to 2.038 while RBOB gasoline also climbed to 1.965.....Here is the charts!
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Crude Oil Bulls Keep The Momentum as They Look to Wednesday Inventory
Crude oil was higher overnight as it consolidates above the 10 day moving average. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.
Closes above the 20 day moving average crossing at 75.30 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 68.86 is the next downside target.
First resistance is the 20 day moving average crossing at 75.30
Second resistance is last Friday's high crossing at 75.65
First support is the 10 day moving average crossing at 73.44
Second support is last week's low crossing at 70.83
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Natural gas was slightly lower overnight as it consolidates some of Tuesday's rally. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short term top might be in or is near.
Closes below the 20 day moving average crossing at 5.196 would confirm that a short term top has been posted. If January extends this month's rally, the 87% retracement level of the October-December decline crossing at 6.036 is the next upside target.
First resistance is Monday's high crossing at 5.929
Second resistance is the 87% retracement level of the October-December decline crossing at 6.036
First support is the 10 day moving average crossing at 5.541
Second support is the 20 day moving average crossing at 5.196
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The U.S. Dollar was slightly 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 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target. Closes below the 20 day moving average crossing at 76.64 would confirm that a short term top has been posted.
First resistance is Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72
First support is the 10 day moving average crossing at 77.66
Second support is the 20 day moving average crossing at 76.64
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Oil Trades Above $74 on Speculation Supplies Dropped Last Week
Oil held steady above $74 a barrel in New York before a U.S. Energy Department report likely to show crude stockpiles fell last week as temperatures dropped. The report today is expected to show oil inventories in the U.S., the world’s biggest energy consumer, shrank by 1.6 million barrels in the week ended Dec. 18, according to the median estimate of 16 analysts polled by Bloomberg News. Data from the industry funded American Petroleum Institute yesterday showed commercially held U.S. inventories fell by 3.71 million barrels.
“Due to cold weather, we are seeing stock draws in crude and that is the supporting factor these days,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich. “It brings the inventory levels nearer to the five year average.” Crude oil for February delivery rose as much as 47 cents, or 0.6 percent, to $74.87 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $74.66 as of 10:36 a.m. London time. Futures closed yesterday at $74.40, the highest settlement since Dec. 4. There will be no trading on Dec. 25 for Christmas and on Jan. 1 for New Year’s Day.....Read the entire article.
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Crude Oil and Natural Gas Technical Outlook For Wednesday Morning
Nymex Crude Oil (CL)
Crude oil's recovery from 68.58 is still in progress and further rise cannot be ruled out. But still, upside is expected to be limited by 61.8% retracement of 82.0 to 68.58 at 76.87 and bring resumption of the fall from 82.0. On the downside, below 71.21 will indicate that recovery from 68.58 has completed and will flip intraday bias for this support first. Break will target 65.05 key support next. However, decisive break of 76.87 fibo resistance will argue that fall from 82.0 has completed and will turn focus back to this resistance.
In the bigger picture, at this point, crude oil is still limited by 55 days EMA (now at 74.47) and hence, we're favoring the case that medium term rise from 33.2 has completed at 82.0 with bearish divergence condition in daily MACD. Another fall is expected after finishing the current recovery from 68.58 and a break there will target 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60). Break there will confirm this bearish case and indicate that the down trend from 147.27 might be resuming for another low below 33.2. However, sustained trading above mentioned 76.87 will dampen this bearish view and argue that another high above 82.0 might be seen before crude oil tops in 76.77/90.24 fibo resistance zone.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Nymex Natural Gas (NG)
Natural gas' consolidation from 5.929 is still in progress and intraday bias remains neutral for the moment. More sideway trading should be seen with risk of another fall to 4 hours 55 EMA (now at 5.535) and below. But downside is expected to be contained well above 4.837 support (61.8% retracement of 4.157 to 5.929 at 4.834) and bring rally resumption. Above 5.930 will target 38.2% retracement of 13.694 to 2.409 at 6.72 next.
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 should not be completed yet and we would continue to anticipate an upside breakout of the recent range of 4.157/5.138 eventually. Above 5.318 will target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.432 support will dampen this bullish case and turn outlook mixed again.....Nymex Natural Gas Continuous Contract 4 Hours Chart.
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Tuesday, December 22, 2009
CNBC Video: Crude Oil Predictions for 2010
John Licata, chief investment strategist at Blue Phoenix Inc tells CNBC's Sri Jegarajah and Karen Tso that he sees the price for crude at $87/barrel by the later half of 2010.
Crude Oil Closes Higher, Ending Two Day Correction
Crude oil closed higher on Tuesday ending a two day correction. 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.
Closes above the 20 day moving average crossing at 75.45 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 the 20 day moving average crossing at 75.45
Second resistance is last Friday's high crossing at 74.69
First support is the 10 day moving average crossing at 73.27
Second support is last Monday's low crossing at 68.59
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Natural gas closed higher due to short covering on Tuesday as it consolidated some of Monday's decline. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought and are turning bearish signaling that a short term top might be in or is near.
Closes below the 20 day moving average crossing at 5.149 would temper the near term friendly outlook in the market. If January extends this month's rally, the 87% retracement level of this fall's decline crossing at 6.036 is the next upside target.
First resistance is Monday's high crossing at 5.929
Second resistance is the 87% retracement level of this fall's decline crossing at 6.036
First support is the 10 day moving average crossing at 5.459
Second support is the 20 day moving average crossing at 5.149
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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 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target. Closes below the 20 day moving average crossing at 76.44 would temper the near term friendly outlook in the Dollar.
First resistance is today's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72
First support is the 10 day moving average crossing at 77.45
Second support is the 20 day moving average crossing at 76.44
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Oil Falls as U.S. Growth Revised Lower, OPEC Maintains Quotas
Crude oil fell after the U.S. economy expanded at a slower pace than anticipated in the third quarter and OPEC agreed to maintain production targets. Oil slipped after the Commerce Department said that the gross domestic product grew 2.2 percent from July through September, down from a 2.8 percent gain previously reported. The Organization of Petroleum Exporting Countries will hold quotas at 24.845 million barrels a day. “This was a significant revision,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant. “This should weigh on prices.”
Crude oil for February delivery dropped 47 cents, or 0.6 percent, to $73.25 a barrel at 10:14 a.m. on the New York Mercantile Exchange. Prices are up 64 percent this year. This was the fourth time this year that OPEC ministers met without revising production figures. Today’s meeting was held in Luanda, Angola. Rising prices have encouraged some OPEC members to renege on their pledge in 2008 to reduce output by 4.2 million barrels a day. Members complied with 58 percent of cuts in November, down from 60 percent the previous month, according to International Energy Agency estimates.....Read the entire article.
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Crude Oil and Natural Gas Technical Outlook For Tuesday Morning
Nymex Crude Oil (CL)
With 71.21 minor support intact, crude oil's recovery from 68.58 might still extend further. But after all, upside is expected to be limited by 61.8% retracement of 82.0 to 68.58 at 76.87 and bring resumption of the fall from 82.0. On the downside, below 71.21 will indicate that recovery from 68.58 has completed and will flip intraday bias for this support first. Break will target 65.05 key support next. However, decisive break of 76.87 fibo resistance will argue that fall from 82.0 has completed and will turn focus back to this resistance.
In the bigger picture, at this point, crude oil is still limited by 55 days EMA (now at 74.47) and hence, we're favoring the case that medium term rise from 33.2 has completed at 82.0 with bearish divergence condition in daily MACD. Another fall is expected after finishing the current recovery from 68.58 and a break there will target 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60). Break there will confirm this bearish case and indicate that the down trend from 147.27 might be resuming for another low below 33.2. However, sustained trading above mentioned 76.87 will dampen this bearish view and argue that another high above 82.0 might be seen before crude oil tops in 76.77/90.24 fibo resistance zone.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Nymex Natural Gas (NG)
With 4 hours MACD crossed below signal line, an intraday top should be in place at 5.929 and bias is turned neutral for the monument. Some consolidations could be seen with risk of retreat to 4 hours 55 EMA (now at 5.499). But downside is expected to be contained well above 4.837 support (61.8% retracement of 4.157 to 5.929 at 4.834) and bring rally resumption. Above 5.930 will target 38.2% retracement of 13.694 to 2.409 at 6.72 next.
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 should not be completed yet and we would continue to anticipate an upside breakout of the recent range of 4.157/5.138 eventually. Above 5.318 will target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.432 support will dampen this bullish case and turn outlook mixed again.....Nymex Natural Gas Continuous Contract 4 Hours Chart.
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With 71.21 minor support intact, crude oil's recovery from 68.58 might still extend further. But after all, upside is expected to be limited by 61.8% retracement of 82.0 to 68.58 at 76.87 and bring resumption of the fall from 82.0. On the downside, below 71.21 will indicate that recovery from 68.58 has completed and will flip intraday bias for this support first. Break will target 65.05 key support next. However, decisive break of 76.87 fibo resistance will argue that fall from 82.0 has completed and will turn focus back to this resistance.
In the bigger picture, at this point, crude oil is still limited by 55 days EMA (now at 74.47) and hence, we're favoring the case that medium term rise from 33.2 has completed at 82.0 with bearish divergence condition in daily MACD. Another fall is expected after finishing the current recovery from 68.58 and a break there will target 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60). Break there will confirm this bearish case and indicate that the down trend from 147.27 might be resuming for another low below 33.2. However, sustained trading above mentioned 76.87 will dampen this bearish view and argue that another high above 82.0 might be seen before crude oil tops in 76.77/90.24 fibo resistance zone.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Nymex Natural Gas (NG)
With 4 hours MACD crossed below signal line, an intraday top should be in place at 5.929 and bias is turned neutral for the monument. Some consolidations could be seen with risk of retreat to 4 hours 55 EMA (now at 5.499). But downside is expected to be contained well above 4.837 support (61.8% retracement of 4.157 to 5.929 at 4.834) and bring rally resumption. Above 5.930 will target 38.2% retracement of 13.694 to 2.409 at 6.72 next.
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 should not be completed yet and we would continue to anticipate an upside breakout of the recent range of 4.157/5.138 eventually. Above 5.318 will target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.432 support will dampen this bullish case and turn outlook mixed again.....Nymex Natural Gas Continuous Contract 4 Hours Chart.
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