Saudi Arabia Preparing for oil Demand to Peak

A top Saudi energy official expressed serious concern Monday that world oil demand could peak in the next decade and said his country was preparing for that eventuality by diversifying its economic base. Mohammed al-Sabban, lead climate talks negotiator, said the country with the world's largest proven reserves of conventional crude is working to become the top exporter of energy, including alternative forms such as solar power.

Saudi Arabia was among the most vocal opponents of proposals during the climate change talks in Copenhagen. And al-Sabban criticized what he described as efforts by developed nations to adopt policies biased against oil producers through the imposition of taxes on refined petroleum products while offering huge subsidies for coal _ a key industry for the United States. Al-Sabban said the potential that world oil demand had peaked, or would peak soon, was an "alarm that we need to take more seriously" as Saudi charts a course for greater economic diversification.

"We cannot stay put and say 'well, this is something that will happen anyway," al-Sabban said at the Jeddah Economic Forum. The "world cannot wait for us before we are forced to adapt to the reality of lower and lower oil revenues," he added later.

Some experts have argued that demand for oil, the chief export for Saudi Arabia and the vast majority of other Gulf Arab nations, has already peaked. Others say consumption will plateau soon, particularly in developed nations that are pushing for greater reliance on renewable energy sources. With oil demand only now starting to pick up after it was pummeled by the global recession, some analysts say consumers may have learned to live permanently with a lower level of consumption.....Read the entire article.

Secrets of the 52 Week High Rule

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Secrets of the 52 Week High Rule

From guest blogger Adam Hewison.....

Over 30 years ago I learned from a very successful trader, a trade secret I’ve never shared on the web before. In fact, I only shared this trading secret with a few friends during that time.

I learned this trading secret from a trader named Bill… I am keeping his last name private as Bill is a very low key guy and shuns any publicity.

Using his special trading technique, Bill made millions and millions of dollars from his office. Now for the first time, I am going to share with you the exact same technique that Bill used so successfully for so many years. The best part is that this technique is still working more than 30 years after I learned about it. Now it’s time for the next generation of traders to learn Bill’s secret.

Bill didn’t even have a name for this killer trading technique. I named
it “The 52 week new highs on Friday rule”.

Just click here to learn this trading secret and please take a minute to leave a comment and let us know what you think.

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Crude Oil Bulls Take a Small Advantage Into The Weekend

Crude oil closed lower due to profit taking on Friday as it consolidated some of the rally off last week's low. The mid range close sets the stage for a steady opening on Tuesday.

Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If March extends the rally off last week's low, the reaction high crossing at 78.04 is the next upside target.

First resistance is Thursday's high crossing at 75.69.
Second resistance is the reaction high crossing at 78.04.

First support is last Friday's low crossing at 69.50.
Second support is September's low crossing at 67.46.

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Natural gas closed higher on Friday as it extended this month's trading range. The high range close sets the stage for a steady to higher opening on Tuesday.

Stochastics and the RSI are turning neutral to bullish hinting that sideways to higher prices are possible near term. Closes above the reaction high crossing at 5.680 or below 5.060 are needed to confirm a breakout of the aforementioned trading range.

First resistance is today's high crossing at 5.556
Second resistance is Monday's high crossing at 5.680

First support is today's low crossing at 5.204
Second support is January's low crossing at 5.060

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The U.S. Dollar closed higher on Friday as it consolidates above the 38% retracement level of the 2009-2010 decline crossing at 79.71. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are diverging but are turning neutral signaling that sideways to higher prices are possible near term.

If March extends this winter's rally, the 50% retracement level of the 2009-2010 decline crossing at 81.32 is the next upside target. Closes below the 20 day moving average crossing at 79.24 are needed to confirm that a short term top has been posted.

First resistance is today's high crossing at 80.83
Second resistance is the 50% retracement level of the 2009-2010 decline crossing at 81.32

First support is the 10 day moving average crossing at 79.99
Second support is the 20 day moving average crossing at 79.24


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Oil Falls for First Day in Five as China Seeks to Cool Economic Expansion

Crude oil fell for the first day in five after China, the world’s fastest growing energy consuming country, sought to cool its economic expansion. Oil dropped below $74 a barrel as the People’s Bank of China ordered banks to set aside more deposits as reserves for the second time in a month, boosting the dollar. An Energy Department report today showed a bigger than forecast increase in inventories.

“All of the markets still need every bit of stimulus the central banks can provide,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses on food and energy commodities. “This move augurs for diminished demand and lower prices.” Crude oil for March delivery fell $1.29, or 1.7 percent, to $73.99 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures have dropped 6.8 percent this year. Oil increased for the first week in five.

China’s central bank said today it will raise banks’ reserve requirement ratio by 50 basis points. China’s policy makers aim to avert asset bubbles and restrain inflation after flooding the economy with money last year to drive a recovery from the first global recession since World War II. “This means it’s more difficult for the Chinese banks to lend, and China has been the bright spot in an otherwise unspectacular global economic recovery,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut.....Read the entire article.

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IEA - Oil Market Report

Highlights of the latest OMR dated February 11th 2010.....

Benchmark crude oil prices fell to six week lows by early February, after warmer weather in the Northern Hemisphere, negative macroeconomic news and sudden strength in the dollar set in motion a $12/bbl slide. Prices regained some of their losses in recent days, with WTI last trading at $73.80/bbl and Brent at $72/bbl.

Forecast global oil demand is revised up 170 kb/d for 2010 as more robust IMF GDP projections are partly offset by a higher price assumption and persistently weak OECD oil demand. Global oil demand is estimated at 84.9 mb/d in 2009 (-1.5% or -1.3 mb/d year-on-year) and 86.5 mb/d in 2010 (+1.8% or +1.6 mb/d versus 2009), with growth entirely in non-OECD countries.

Global oil supply fell 45 kb/d to 85.8 mb/d in January, with higher total OPEC output (mostly NGLs) offset by lower non-OPEC production. Average 2009 non-OPEC production is revised 70 kb/d higher at 51.4 mb/d while 2010 supply is revised up by 120 kb/d to 51.6 mb/d on slightly improved US and North Sea crude prospects.

OPEC crude output was up 105 kb/d at 29.1 mb/d in January. OPEC NGL production is forecast to rise 0.8 mb/d to 5.5 mb/d in 2010, with just over half of the increase related to ramp up from 2009 project start-ups. The call on OPEC crude and stock change for 2010 is revised up 300 kb/d to 29.4 mb/d.

OECD industry stocks fell 67.8 mb in December to 2 678 mb, around 0.8% below 2008’s level, on lower crude and middle distillate inventories. End-December forward demand cover fell to 58.1 days, now only 0.1 day higher than a year ago. Preliminary data point to a January OECD stockbuild of 11.4 mb, but with lower floating storage.

Global 4Q09 and 1Q10 refinery crude throughput forecasts remain unchanged at 72.3 mb/d and 72.6 mb/d respectively, though in the latter’s case, higher Canadian, Mexican and OECD Pacific runs offset lower non-OECD throughputs. Despite some signs of improvement for the refining industry, the sector’s short-term outlook remains fundamentally bearish.

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Crude Oil Pivot, Support and Resistance Numbers For Friday Morning

Crude oil was lower overnight as it consolidates some of the rebound off last Friday's low. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

Multiple closes above the 20 day moving average crossing at 74.92 are needed to confirm that a short term low has been posted. If March renews last week's decline, last September's low crossing at 67.46 is the next downside target.

Crude oil pivot point, our line in the sand is 74.78

First resistance is the 20 day moving average crossing at 74.92
Second resistance is Thursday's high crossing at 75.69

First support is the overnight low crossing at 73.50
Second support is last Friday's low crossing at 69.50

Is Gold Poised to Go Higher or Lower?

Natural gas was lower overnight as it extends this month's choppy sideways trading pattern. Stochastics and the RSI are neutral signaling that sideways to lower prices are possible near term.

If March extends Tuesday's decline, the reaction low crossing at 5.227 is the next downside target. Closes above the 20 day moving average crossing at 5.427 would temper the near term bearish outlook.

Friday's pivot point for natural gas is 5.366

First resistance is the 20 day moving average crossing at 5.427
Second resistance is Monday's high crossing at 5.680

First support is Tuesday's low crossing at 5.330
Second support is the reaction low crossing at 5.227

Secrets of the 52 Week High Rule

The U.S. Dollar was higher overnight as it extends the recent breakout above the 38% retracement level of the 2009 decline crossing at 79.71. Stochastics and the RSI are diverging but are turning bullish signaling that additional gains are possible near term.

If March extends this winter's rally, the 50% retracement level of the 2009 decline crossing at 81.32 is the next upside target. Closes below the 20 day moving average crossing at 79.26 are needed to confirm that a short term top has been posted.

First resistance is the overnight high crossing at 80.83
Second resistance is the 50% retracement level of the 2009 decline crossing at 81.32

First support is the 10 day moving average crossing at 80.03
Second support is the 20 day moving average crossing at 79.26

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Crude Oil Technical Outlook For Friday Morning

With 4 hours MACD crossed below signal line, crude oil's recovery from 69.50 might have completed at 75.69 already. Break of 72.60 will flip intraday bias back to the downside for retesting 69.50 first. Break will confirm decline resumption towards 68.59 support next. On the upside, above 75.69 will turn focus to 78.04 minor resistance. Break there will argue that whole fall from 83.95 has finished and will bring stronger rebound instead.

In the bigger picture, prior break of medium term trend line support added much credence to the case of reversal. Medium term rise from 33.2, which is treated as a correction to fall from 147.27, should have completed at 83.95 already, on bearish divergence condition in daily MACD. Current fall from 83.95 should extend through 68.59 support towards next key cluster level at 58.32 (50% retracement of 33.2 to 83.95 at 58.58). Decisive break there will strongly suggest that whole decline from 147.27 is resuming for a new low below 33.2. On the upside, break of 78.04 resistance is needed to confirm that fall from 83.95 has completed. Otherwise, outlook will remain bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.


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Oil Falls First Day in Five on Stronger Dollar, Forecast for Supply Gain

Crude oil fell in New York for the first day in five as the dollar extended gains against the euro and analysts forecast an increase in U.S. stockpiles, signaling weak demand in the biggest energy consuming nation. Oil slipped below $75 a barrel after the dollar strengthened on speculation the European Union will fail to take sufficient measures to help Greece tackle its fiscal deficit, damping the investment appeal of commodities. A weekly Energy Department report today may show crude and gasoline supplies increased last week, according to a Bloomberg News survey.

“The market is hanging on its edge, waiting for the Department of Energy numbers,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “Prices could still come under pressure because there is still that inventory rise overhang in the market.” Crude oil for March delivery fell as much as 53 cents, or 0.7 percent, to $74.75 a barrel in electronic trading on the New York Mercantile Exchange. It was at $74.82 at 12:52 p.m. Singapore time. Yesterday, the contract rose 1 percent to settle at $75.28. Futures have gained 5.1 percent this week, poised for the first weekly gain in five.

The 16 nation euro dropped to near a one week low against the dollar after the European Union stopped short of offering concrete steps to help Greece. The U.S. currency traded at $1.3665 per euro at 12:28 p.m. in Singapore from $1.3693 yesterday in New York.....Read the entire article.

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Crude Oil Market Commentary For Thursday Evening

Crude oil closed higher on Thursday and tested the 20 day moving average crossing at 75.21. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If March extends the rally off last week's low, the reaction high crossing at 78.04 is the next upside target.

First resistance is today's high crossing at 75.69
Second resistance is the reaction high crossing at 78.04

First support is last Friday's low crossing at 69.50
Second support is September's low crossing at 67.46

Just click here for your FREE trend analysis of crude oil ETF USO

Natural gas closed higher due to short covering on Thursday as it consolidates some of this week's decline. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning bearish hinting that sideways to lower prices are possible near term.

Closes below last Thursday's low crossing at 5.227 are needed to confirm that a short term top has been posted. If March renews the rally off January's low, the reaction high crossing at 5.804 is the next upside target.

First resistance is the 20 day moving average crossing at 5.438
Second resistance is Monday's high crossing at 5.680

First support is last Thursday's low crossing at 5.227
Second support is January's low crossing at 5.060

Just click here for your FREE trend analysis of natural gas ETF UNG

The U.S. Dollar closed slightly lower on Thursday while consolidating above initial support marked by the 10 day moving average crossing at 79.92. The mid-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are turning bearish signaling that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 79.09 are needed to confirm that a short term top has been posted. If March resumes this winter's rally, the 50% retracement level of the 2009-2010 decline crossing at 81.32 is the next upside target.

First resistance is last Friday's high crossing at 80.82
Second resistance is the 50% retracement level of the 2009-2010 decline crossing at 81.32

First support is the 10 day moving average crossing at 79.92
Second support is the 20 day moving average crossing at 79.09


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Have Metals and Stocks Bottomed Yet?

From guest analyst Chris Vermeulen at The Gold and Oil Guy .Com....

Everyone is wondering if gold, silver and the indexes have bottomed after last week’s heavy selling. To put things into perspective there were over 30 sell orders for every 1 buy order at the NYSE. That is pure panic and to confirm extreme fear, several of my broker buddies said last week was crazy with clients demanding to liquidate their positions ASAP to be 100% in cash.

This type of sentiment and price movement warns us of a possible market bottom. I am getting the feeling that traders and investors have been expecting this sharp drop I don’t see or feel a large amount of fear in the marketplace. Last Thursday and Friday war crazy but I think we need one more drop to really shake things up before a bottom is set.

Below are some charts showing where the market currently stands and what the charts are pointing to.

GLD Gold ETF Trading – Daily Chart

Gold is clearly trending down on the daily chart. One more thrust down should shake things up enough to trigger the next rally.



SLV Silver ETF Trading – Daily Chart

Silver has formed a Head & Shoulders pattern and has broken through multiple support levels. A measured move to the down side would be $14 for silver which could happen in the coming days.



SP500, NYSE, GOLD Futures, US Dollar Index – Intraday Charts

These charts clearly show the price action of the past month. As you can see the trend of stocks and gold are down with consolidations (pauses). This is the exact reason why you must trade with the trend and not do counter trend trades. Bounces are more like sideway movements making it very difficult to try and play bounces in a down trend.

If you focus on selling at key resistance levels then moves tend to be much more profitable. That being said, we did go long last Friday because of the extreme oversold market level. I was expecting a follow through Monday or Tuesday which has yet to happen. We have now moved our stops to break even or better to eliminate our down side risk.



Spot Gold 24Hr Trading Chart

This chart says it all. The market and gold is very volatile making it difficult to trade right now. Bulls and bears are battling it out. Only time will tell!



Stocks & Commodity Trading Conclusion:

In short, it’s been a slow week without any real exciting moves. Thursday and Friday could be interesting if traders exit their positions going into the long weekend in order to protect themselves from any surprise economic news.

From the looks of gold, silver and the indexes I sense selling could be just around the corner. We are currently long a few positions with our stops are break even or better in hopes for a pop and rally going into the holiday weekend but only time will tell.


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