Phil Flynn: Baby You Can Park my Car

Baby you can park my car. Yes it might even start, baby you can park my car and baby it is still cold outside. America hibernates and parks their cars as gas consumption hits a 13 month low. The drop in demand led to big surge in gasoline inventories according to two widely followed industry reports.

The first hint that America seemed to stay home for the holidays came from the MasterCard Spending pulse report that showed that gasoline purchases fell to 8.93 million barrels a day which was down 3.5% from the week before and the lowest level of gasoline demand since September 2009. That drop in demand probably explains why in another report by the American Petroleum Institute that showed gasoline inventories surged by 5.58 million barrels.

These reports suggest the obvious, bad weather and the holidays had an adverse impact on gasoline demand. Yet it may also show that demand may still be a bit price sensitive. Retail gas prices also surged last week as the national average pump price rose 4 cents last week to $2.62 a gallon. That according to Bloomberg is 63% higher than it was a year ago at this time.

Of course the increase in price should help inspire a bit more refinery activity. The February gasoline crack spread that indicates the profitability for a refiner to turn crude into gas, improved to $7.48 cents up 65 cents from the beginning of the week. For heating oil the crack spread tightened a bit but is trading at $10.49 cents. Improving margins hopefully will get refiners back in the game producing more product to meet what we hope will be an improving demand picture.....Read the entire article.

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Oil Falls From 14 Month High on Unexpected U.S. Supply Gain

Crude oil fell from a 14 month high after a U.S. Energy Department report showed that supplies unexpectedly increased as refineries reduced operating rates and imports gained. Stockpiles climbed 1.33 million barrels to 327.3 million in the week ended Jan. 1. Supplies at Cushing, Oklahoma, where New York traded West Texas Intermediate oil is stored, surged to the highest level since tracking began in 2004. Imports rose to the highest amount since November as refinery utilization rates dropped to the lowest total since that month.

“This report shows that there is plenty of crude oil on hand,” said Michael Fitzpatrick, vice president of energy with MF Global in New York. “There are also enough shut refinery units to meet any increase in fuel demand.” Crude oil for February delivery dropped 50 cents, or 0.6 percent, to $81.27 a barrel at 10:47 a.m. on the New York Mercantile Exchange. Oil traded at $82.47, the highest since Oct. 14, 2008, before the release of the report at 10:30 a.m. in Washington. Prices are up 67 percent from a year ago. Stockpiles of crude oil were forecast to decline 1 million barrels, according to the median estimate of 15 analysts surveyed by Bloomberg News.....Read the entire article.

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Crude Oil Stockpiles Unexpectingly Climb by 1.3 Million Barrels

Crude inventories and gasoline supplies rose last week, the government said Wednesday. Crude inventories rose by 1.3 million barrels, or 0.4 percent, to 327.3 million barrels, which is half a percent above year ago levels, the Energy Department's Energy Information Administration said in its weekly report. Analysts had expected a drop of 1.6 million barrels for the week ended Jan. 1, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Gasoline inventories increased by 3.7 million barrels, or 1.7 percent, to 219.7 million barrels. That was above analyst expectations and 2.9 percent above year ago levels. Demand for gasoline over the four weeks ended Jan. 1 was 0.3 percent higher than a year earlier, averaging nearly 9 million barrels a day. At the same time, U.S. refineries ran at 79.9 percent of total capacity on average, a drop of 0.4 percentage point from the prior week. Analysts expected capacity to build to 81.05 percent.

Inventories of distillate fuel, which include diesel and heating oil, fell by 300,000 barrels to 159 million barrels for the week ended Jan. 1. Analysts expected distillate stocks to drop by 1.8 million barrels. Crude prices fell 72 cents to $81.05 per barrel on the New York Mercantile Exchange.....Read the entire article.

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Crude Oil Trades Lower on Overnight Profit Taking

Crude oil was slightly lower due to light profit taking overnight as it consolidates some of the rally off December's low. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this rally, the reaction high crossing at 82.28 is the next upside target. Closes below the 20 day moving average crossing at 76.14 are needed to confirm that a short term top has been posted.

Wednesday's pivot point, our line in the sand is 81.57

First resistance is Tuesday's high crossing at 82.00
Second resistance is the reaction high crossing at 82.28

First support is the 10 day moving average crossing at 79.02
Second support is the 20 day moving average crossing at 76.14

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Natural gas was higher due to short covering overnight but remains below broken support marked by the 10 day moving average, which crosses at 5.772. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

Closes below the 20 day moving average crossing at 5.613 are needed to confirm that a short term top has been posted. If February resumes December's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target.

Natural gas pivot point for Wednesday is 5.703

First resistance is last Tuesday's high crossing at 6.038
Second resistance is the 87% retracement level of the October-December decline crossing at 6.077

First support is the 20 day moving average crossing at 5.613
Second support is last Thursday's low crossing at 5.505

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The U.S. Dollar was higher due to short covering overnight but remains below initial support marked by the 10 day moving average crossing at 78.13. Stochastics and the RSI are bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 77.69 are needed to confirm that a short term top has been posted. If March renews last month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is the 10 day moving average crossing at 78.13
Second resistance is the reaction high crossing at 78.77

First support is the 20 day moving average crossing at 77.69
Second support is Tuesday's low crossing at 77.39

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Crude Oil and Natural Gas Technical Outlook For Wednesday Morning

Nymex Crude Oil (CL)

Crude oil is still bounded in tight range below 82.0 resistance for the moment and with 4 hours MACD crossed below signal line, intraday bias is turned neutral for the moment. Some more consolidations could be seen and a deeper retreat cannot be ruled out. But downside should be contained by 77.83 support and bring rally resumption. Firm break of 82.0 will will confirm that whole medium term rise from 33.2 has resumed and should target next key resistance level at 90. However, considering mild bearish divergence condition 4 hours MACD, break of 77.83 will indicate that rise from 68.59 has possibly completed and will turn bias back to the downside and bring deeper fall.

In the bigger picture, the strong rally from 68.59 and sustained trading above 55 days EMA argues that whole medium term rise from 2009 low of 33.2 is still in progress for another high above 82.0. Above this 82.0 will target next key cluster resistance level at 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. Nevertheless, we'll continue to look for reversal signal as rise from 33.2, which is treated as correction to whole fall from 147.27, is expected to conclude inside 76.77/90.24 fibo resistance zone. On the downside, though, break of 68.59 is needed to revive the case that crude oil has topped out in medium term. Otherwise, outlook will be neutral at worst even in case of deep pull back.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

Nymex Natural Gas (NG)

Intraday bias in natural gas is still neutral as consolidation from 6.035 continues. Some more sideway trading could be seen but after all, we'd expect 5.29 resistance turned supprot, which is close to 38.2% retracement of 4.157 to 6.035 at 5.319, to hold and bring rally resumption. Break of 6.035 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 is still in progress and should target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. On the downside, break of 4.157 support is needed to indicate that medium term rise from 2.409 has completed. Otherwise, outlook is neutral at worst even in case of deep pullback..... Nymex Natural Gas Continuous Contract 4 Hours Chart.

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Gasoline Extends Rally Off December's Low

Unleaded gas closed higher on Tuesday as it extends the rally off December's low. 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 February extends this rally, October's high crossing at 213.53 is the next upside target. Closes below the 20 day moving average crossing at 195.81 are needed to confirm that a short term top has been posted.

First resistance is today's high crossing at 212.70
Second resistance is October's high crossing at 213.53

First support is the 10 day moving average crossing at 202.09
Second support is the 20 day moving average crossing at 195.81

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Where is Crude Oil Headed on Wednesday?

CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed tomorrow.




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Crude Oil Bull's Continue to Struggle With $82 Dollar Resistance

Crude oil closed higher on Tuesday as it extends the rally off December's low. 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 February extends this rally, the reaction high crossing at 82.28 is the next upside target. Closes below the 20 day moving average crossing at 75.85 would confirm that a short term top has been posted.

First resistance is today's high crossing at 81.99
Second resistance is the reaction high crossing 82.28

First support is the 10 day moving average crossing at 78.23
Second support is the 20 day moving average crossing at 75.85

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Natural gas closed lower on Tuesday and the low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

Closes below the 20 day moving average crossing at 5.580 are needed to confirm that a short term top has been posted. If February resumes the rally off December's low, the 87% retracement level of this fall's decline crossing at 6.077 is the next upside target.

First resistance is last Tuesday's high crossing at 6.038
Second resistance is the 87% retracement level of this fall's decline crossing at 6.077

First support is the 20 day moving average crossing at 5.580
Second support is last Thursday's low crossing at 5.505

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The U.S. Dollar closed higher due to a late day short covering rally on Tuesday but remains below the 10 day moving average crossing at 78.19. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain neutral to bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 77.60 are needed confirm that a short term top has been posted. If March renews the rally off November's low, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is the reaction 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 20 day moving average crossing at 77.60
Second support is today's low crossing at 77.39

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Gold Rally Triggers Buy Stops as Crude Oil Leads Commodities Surge

The price of gold eased back from its strongest Dollar and Euro prices in nearly three weeks in London on Tuesday, holding above a one month high of £700 per ounce for UK investors as European shares and US stock futures held flat. The CRB commodities index rose almost 2% as sugar neared a three decade high and US crude oil contracts touched $82 per barrel, more than twice the price of 12 months ago. Consumer price inflation in the 16 nation Eurozone leapt in Dec. to a 10 month high, the Eurostat agency said Tuesday morning, unwinding the last of 2009's second half deflation.

"Buy stops were triggered" as gold rose late in Asia says a Hong Kong dealer today, with professional traders re entering the gold market after last month's 12% drop. "The Dollar remains the key driver," says an analyst's note. "All commodities have benefited from an increase in risk appetite." But "Buying interest in the physical market seems to have faded on gold's [1.8%] rally yesterday," says Standard Bank's daily commodity briefing. "We need to see much more Dollar weakness on a trade weighted basis to sustain a rally in gold." (Is gold's 10 year run all about the Dollar? Read Dollar Nonsense here...)

Monday saw the 1128 tonne SPDR Gold trust shed five tonnes of the gold backing its exchange traded shares, the first such drop in almost a month but only equal to the annual 0.4% expense ratio it charges stock holders. Long dated government bonds fell Tuesday morning, pushing 30 year US Treasury yields up to 4.75% ahead of Pending US Home Sales data and Vehicle Sales figures for Dec.....Read the entire article.

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Crude Oil Fluctuates as Forecasts Show Warming U.S. Weather

Crude oil fluctuated, after rising for eight days in New York, on forecasts that temperatures in the northern U.S. will climb next week. The weather in the U.S. Northeast, the area responsible for about four-fifths of the country’s heating oil use, will return to normal between Jan. 12 and Jan. 18, according to the Climate Prediction Center of the National Weather Service. Oil surged yesterday on the cold, manufacturing growth in China and the U.S., rising equities and a decline in the dollar. “It looks like the worst of the cold will hit us between Jan. 7 and Jan. 10 before temperatures moderate,” said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. “Traders are actually paying more attention to the S&P and the dollar, neither of which are doing anything. We have to look at these markets for direction.”

Crude oil for February delivery fell 4 cents to $81.47 a barrel at 10:49 a.m. on the New York Mercantile Exchange. Futures reached $81.99 today, the highest intraday price since Oct. 21, when they touched $82. The Standard & Poor’s 500 Index was little changed at 1,133.23. The dollar traded at $1.4423 per euro, down 0.1 percent from yesterday. A weak U.S. currency bolsters the appeal of commodities to investors looking for alternative investments. “It’s a foregone conclusion that we will soon break through last year’s high of $82,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. “We’re getting some of the coldest weather in years and that’s bound to increase demand”.....Read the entire article.

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