Crude Oil Market Commentary For Wednesday Evening

Crude oil closed lower on Wednesday due to an increase in oil inventories and a decline in the equity markets. The low range close sets the stage for a steady to lower 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 May extends the rally off February's low, the 50% retracement level of the 2008-2009 decline crossing at 97.31 is the next upside target. Closes below the 20 day moving average crossing at 82.60 are needed to confirm that a short term top has been posted. First resistance is Tuesday's high crossing at 87.09. Second resistance is the 50% retracement level of the 2008-2009 decline crossing at 97.31. First support is the 10 day moving average crossing at 83.34. Second support is the 20 day moving average crossing at 82.60.

Natural gas closed lower due to profit taking on Wednesday as it consolidated some of Monday's rally. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Multiple closes above Tuesday's high crossing at 4.334 are needed to confirm that a low has been posted. If May renews this winter's decline, weekly support crossing at 3.502 is the next downside target. First resistance is Tuesday's high crossing at 4.334. Second resistance is the 25% retracement level of the October-April decline crossing at 4.405. First support is today's low crossing at 4.010. Second support is last Thursday's low crossing at 3.810.

The U.S. Dollar closed higher due to short covering on Wednesday as it consolidated some of last week's decline but remains below the 10 day moving average crossing at 81.59. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below last week's low crossing at 80.52 are needed to confirm that a short term top has been posted. If June renews this winter's rally, the May 2009 high on the weekly continuation chart crossing at 83.34 is the next upside target. First resistance is March's high crossing at 82.52. Second resistance is the May 2009 high on the weekly continuation chart crossing at 83.34. First support is the 20 day moving average crossing at 81.12. Second support is last Thursday's low crossing at 80.52.


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Crude Oil Extends Decline After Inventories Increase More Than Predicted

Crude oil fell for the first time in seven days after a government report showed a bigger than forecast increase in U.S. inventories as imports surged. Supplies rose 1.98 million barrels to 356.2 million last week, the Energy Department said today. Stockpiles were forecast to climb by 1.35 million barrels, according to a Bloomberg News survey of analysts. Imports gained 5.5 percent to 9.56 million barrels a day, the most since September. Refineries operated at the highest rate since October.

“The fundamentals don’t support prices at these levels,” said Michael Fitzpatrick, vice president of energy at MF Global in New York. “Oil supplies increased even as refineries boosted operating rates, which shows there is no problem with supply.” Crude oil for May delivery fell 22 cents, or 0.3 percent, to $86.62 a barrel at 1:43 p.m. on the New York Mercantile Exchange. Prices reached $87.09 yesterday, the highest level since Oct. 9, 2008. Futures are up 9.1 percent this year.

Imports of crude oil increased by an average 501,000 barrels a day last week, the report showed. Fuel imports climbed 7.5 percent to 2.76 million barrels, the highest level since the week ended Feb. 5. “Imports were very strong at over 9.5 million barrels a day,” said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “That tells me that refiners are stocking up now because they are concerned that prices will rise further in the months ahead”....Read the entire article.

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Dan Dicker: How To Buy $86 Oil

Dan Dicker, senior TSC contributor, and Chris Jarvis, president and founder of Caprock Risk Management, reveal how oil could head to $90 and what stocks to buy.



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Crude Oil Daily Technical Outlook Wednesday Morning

Crude oil continues to struggle around mentioned target of 61.8% projection of 69.50 to 83.16 from 78.56 at 86.92 and has possibly formed a temporary top with 4 hours MACD staying below 4 hours MACD. Some consolidations would likely be seen for the moment with risk of pull back to 4 hours 55 EMA (now at 84.11). But break of 78.56 support is needed to indicate that crude oil has topped. Otherwise, outlook will remain bullish. Sustained trading above 86.92 will target 90 psychological level next.

In the bigger picture, the strong break of 83.95 high confirmed that medium term rally from 33.2 has resumed. Nevertheless, there is no change in the view that it's the second wave of the whole correction that started in 2008 at 147.27. Hence, we'd continue to expect strong resistance near to 50% retracement of 147.27 to 33.2 at 90.24 to bring reversal. On the downside, below 78.56 support will be the first signal of topping and will turn focus back to 69.50 support for confirmation.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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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 Market Commentary For Tuesday Evening

Crude oil closed higher on Tuesday as it extends Monday's breakout above the 38% retracement level of the 2008-2009 decline crossing at 86.16. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If May extends the rally off February's low, the 50% retracement level of the 2008-2009 decline crossing at 97.31 is the next upside target. Closes below the 20 day moving average crossing at 82.41 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 87.09. Second resistance is the 50% retracement level of the 2008-2009 decline crossing at 97.31. First support is the 10 day moving average crossing at 82.96. Second support is the 20 day moving average crossing at 82.41.

Natural gas closed lower due to profit taking on Tuesday as it consolidated some of Monday's rally. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Multiple closes above the 20 day moving average crossing at 4.224 are needed to confirm that a low has been posted. If May renews this winter's decline, weekly support crossing at 3.502 is the next downside target. First resistance is today's high crossing at 4.334. Second resistance is the 25% retracement level of the October-April decline crossing at 4.405. First support is the 10 day moving average crossing at 4.063. Second support is last Thursday's low crossing at 3.810.

The U.S. Dollar closed higher due to short covering on Tuesday as it consolidated some of last week's decline but remains below the 10 day moving average crossing at 81.64. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 80.86 would confirm that a short term top has been posted. If June renews this winter's rally, the May 2009 high on the weekly continuation chart crossing at 83.34 is the next upside target. First resistance is March's high crossing at 82.52. Second resistance is the May 2009 high on the weekly continuation chart crossing at 83.34. First support is the 20 day moving average crossing at 81.07. Second support is last Thursday's low crossing at 80.52.

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Crude Oil Trades Little Changed Near 17 Month High Before U.S. Inventory Report

Crude oil traded little changed near a 17 month high in New York before a report forecast to show that supplies of U.S. crude increased while gasoline fell. U.S. gasoline stockpiles probably dropped 1.9 million barrels last week, while inventories of crude oil climbed 1 million barrels, according to a Bloomberg survey before tomorrow’s Energy Department report. Oil rose 2.1 percent yesterday to $86.62 a barrel, the highest close since Oct. 8, 2008, as growth in U.S. service industries signaled the economy is recovering from the worst recession since the 1930s.

“The market’s pausing for breath after such a big move up,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. “With the recovery still at a fragile stage, and U.S. inventories ample, we’re unlikely to see prices surging to $100.” Crude oil for May delivery was 4 cents lower at $86.58 a barrel in electronic trading on the New York Mercantile Exchange at 1:24 p.m. London time. Brent crude for May settlement was down 2 cents at $85.86 on London’s ICE Futures Europe exchange.

U.S. service industries expanded in March at the fastest pace since May 2006, indicating the country’s recovery may be spreading beyond manufacturing and starting to create jobs. The Institute for Supply Management’s index of non-manufacturing businesses, which make up almost 90 percent of the economy, rose to 55.4 from 53 in the prior month. This exceeded the median forecast of 54 in a Bloomberg News survey of economists.

‘Encouraging Data’

“We’ve seen some encouraging economic data the last few days,” said Toby Hassall, a research analyst at CWA Global Markets Pty in Sydney. “It’s keeping the global recovery story in place. Overall, we are expecting global oil demand growth to be positive this year.” The Energy Department will release its Weekly Petroleum Status Report tomorrow at 10:30 a.m. in Washington. It’s also due to put out its monthly Short-Term Energy Outlook today.

U.S. gasoline stockpiles probably dropped 1.9 million barrels from 224.9 million the prior week, according to the median estimate from seven analysts polled by Bloomberg News. Distillate fuel supplies, including heating oil and diesel, fell 1.5 million barrels from 144.6 million. Commercially held crude oil inventories are expected to have climbed 1 million barrels, increasing for a 10th week, the longest stretch of gains since late 2004, the survey showed. Stockpiles previously reached 354.2 million barrels, 6.5 percent above the five year average.


Reporter Grant Smith can be reached at gsmith52@bloomberg.net



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Just Announced Special Trial Member Webinar, Adam Hewison Answers Trial Members Questions LIVE

A few days ago we told you about the special MarketClub Trial that's running, and today we called my inside contact and told him to give MORE to my members who
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Crude Oil Daily Technical Outlook For Tuesday Morning

At this point, crude oil is consolidating below mentioned target of 61.8% projection of 69.50 to 83.16 from 78.56 at 86.92. Intraday bias remains on the upside for the moment and strong rally should be seen to 90 psychological level after taking out 86.92. On the downside, below 85.06 minor support will turn bias neutral and bring consolidations first before staging another rally.

In the bigger picture, the strong break of 83.95 high confirmed that medium term rally from 33.2 has resumed. Nevertheless, there is no change in the view that it's the second wave of the whole correction that started in 2008 at 147.27. Hence, we'd continue to expect strong resistance near to 50% retracement of 147.27 to 33.2 at 90.24 to bring reversal. On the downside, below 78.56 support will be the first signal of topping and will turn focus back to 69.50 support for confirmation.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Crude Oil Rallies to 17 Month High as US Job Data Shines

Crude oil jumped on the first day of trading after the Easter holiday as boosted by strong US economic data, particularly the employment report, and robust market sentiment. The benchmark contract of WTI crude oil rallied +2.06% and settled at 86.62. The contract reached an intraday high of 86.90, the highest level since October, 2008.

US non-farm payrolls increased +162K (consensus: +190K) in March while February's reading was revised -14K form -36K. Private payrolls surged +123K, the strongest gain since May 2007. Unemployment stayed at 9.7% but household employment increased for the 4rd consecutive month. Investors were excited as there are signs of improvement in the US job market.

Added to it were upbeat ISM indices. Manufacturing index improved to 59.6 in March from 56.5 a month ago, while services index also added +2.4 points to 55.4, the highest since May 2006. Oil exporters start raising prices as they see demands are set to improve further. Saudi Aramco, the world's largest state-owned oil company, increased official selling prices for its Extra Light crude oil to customers in the US and Asia for May. Price will be 40 cents higher than April's.

Going back to hard facts - oil inventory, US crude oil inventory has risen for 9 weeks and current level is +6.5% above 5-year average. Although stockpiles for oil products, such as gasoline and distillate, have dropped, they are still holding at very high levels.

Gold strengthened despite firmness in USD. The benchmark contract gained +0.68% to 1133.8. Encouraging US data inevitably raised inflation fear and this helped gold. Others in the precious metal complex also soared. Silver rose +1.27% to 18.12 while platinum and palladium advanced +2.04% and +3.39%, respectively.....Here's the charts!


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