Crude Oil Daily Technical Outlook Wednesday Morning

Crude oil outlook remains basically unchanged. Recovery from 64.24 should have finished at 75.72 already. Further fall should be seen to retest 64.24 low first. Break there will confirm that whole decline for 87.15 has resumed and should target next key level at 60, which is close to 50% retracement of 33.2 to 87.15 at 60.18. On the upside, above 75.72 will bring another rise, but after all, upside should be limited by 61.8% retracement of 87.15 to 64.23 at 78.39 and bring fall resumption.

In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Crude Oil Rises for Second Day After Industry Shows Drop in U.S. Oil Inventories

Crude oil advanced for a second day as an industry report showed a drop in U.S. crude inventories and confidence among U.S. small businesses rose, bolstering optimism that fuel demand will increase in the world’s largest user. Oil gained as much as 1 percent after the American Petroleum Institute said crude inventories dropped for a second week.

An Energy Information Administration report today will probably show stockpiles fell 900,000 barrels, according to a Bloomberg News survey of 15 analysts. The National Federation of Independent Business’s optimism index increased last month to the highest level since September 2008.

“There is some optimism with the macro data, especially in the U.S.,” Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, said by telephone. “The last few weeks there’s been decent draws in the oil inventories in the U.S., and so the EIA data will be important to see if that trend continues.”

Crude oil for July delivery gained as much as 71 cents to $72.70 a barrel in electronic trading on the New York Mercantile Exchange, and was at $72.52 at 2:11 p.m. Singapore time. The contract rose 55 cents, or 0.8 percent, to settle yesterday at $71.99. Oil has declined 8.9 percent this year.

Risks to the global economic outlook have “risen significantly” and policy makers have limited room to provide support to growth, International Monetary Fund Deputy Managing Director Naoyuki Shinohara said in a speech in Singapore today.....Read the entire article.

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Crude Oil, Natural Gas, Gold and Dollar Commentary For Tuesday Evening

Crude oil 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 remain neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at 75.72 are needed to confirm that a short term low has been posted. If July renews the decline off May's high, last July's low crossing at 66.11 is the next downside target. First resistance is the 20 day moving average crossing at 73.39. Second resistance is the reaction high crossing at 75.72. First support is Monday's low crossing at 69.51. Second support is the reaction low crossing at 67.15.

Natural gas closed lower due to profit taking on Tuesday as it consolidates some of the rally off May's low. 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 July extends this week's rally, the 50% retracement level of the November-May decline crossing at 5.151 is the next upside target. Closes below the 20 day moving average crossing at 4.389 would confirm that a short term top has been posted. First resistance is today's high crossing at 4.995. Second resistance is the 50% retracement level of the November-May decline crossing at 5.151. First support is the 10 day moving average crossing at 4.479. Second support is the 20 day moving average crossing at 4.389.

The U.S. Dollar closed lower due to profit taking on Tuesday as it consolidates some of this month's rally. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If June extends this year's rally into uncharted territory, upside targets will now be hard to project. Closes below the 20 day moving average crossing at 86.70 are needed to confirm that a short-term top has been posted. First resistance is Monday's high crossing at 88.80. Second resistance is weekly resistance crossing at 89.71. First support is the 10 day moving average crossing at 87.28. Second support is the 20 day moving average crossing at 86.70.

Gold closed lower due to profit taking on Tuesday hinting that a double top with May's high could have been posted today. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If August extends this week's rally into uncharted territory, upside targets will now be hard to project. Closes below last Friday's low crossing at 1198.10 would confirm that a short term top has been posted. First resistance is today's high crossing at 1254.50. First support is the 20 day moving average crossing at 1216.60. Second support is last Friday's low crossing at 1198.10.

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Can we Expect a Natural Gas Clampdown?

Natural gas blasts in Pennsylvania, West Virginia and Texas are being closely scrutinized as the energy market is already facing greater regulations on offshore drilling. CNBC's Sharon Epperson takes a closer look.




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Phil Flynn: Speaking Loud and Clear

The futures market is speaking loud and clear about the impact of the Gulf oil spill on oil prices but is the Obama administration listening? As I have pointed out in a previous article, the futures market is saying that when it comes to the gulf oil spill we will not have to pay today but hang onto your wallet tomorrow. The futures market is screaming that in the in the longer dated futures contracts that if we restrict offshore drilling in the Gulf or overregulated the price of oil it will go through the roof. Theses sentiments were outlined by an article in Bloomberg News.

According to Bloomberg News, "The oil market is signaling that prices have nowhere to go but up as the biggest spill in U.S. history curbs drilling and makes it more expensive to develop new fields.” Bloomberg point out something we talked about last week and that the spill in Gulf is signaling higher prices in the long run. Bloomberg says that, “Crude’s premium for delivery in eight years rose 86 percent since the April 20 explosion at the BP Plc leased Deepwater Horizon rig in the Gulf of Mexico, based on June 4 prices.

Oil for December 2018 was $22 a barrel more than for next month, compared with $11 before the disaster.” They go on to say, “More regulation may add $5 to the long term contracts, according to Deutsche Bank AG. President Barack Obama extended a ban on new deepwater permits and exploration by Royal Dutch Shell Plc in the Alaskan Arctic for six months, putting off limits as much as 23.2 billion barrels of potential resources, equal to 76 percent of all reserves proven in the U.S.”

The number of rigs drilling in the Gulf of Mexico plunged 50 percent last week to the lowest level in 16 years, Baker Hughes Inc. reported June 4. “The president said stop drilling, and now we are seeing the result. Yet is the president getting the message? The Wall Street Journal reports, “The Obama administration, facing rising anger on the Gulf Coast over the loss of jobs and income from a drilling moratorium, said Monday that it would move quickly to release new safety requirements that would allow the reopening of offshore oil and gas exploration in shallow waters.”

Phil can be reached at pflynn@pfgbest.com and don't forget to watch him daily on the Fox Business Network

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Crude Oil Daily Technical Outlook For Tuesday Morning

No change in crude oil's outlook. As noted before, recovery from 64.24 should have finished at 75.72 already. Further fall should be seen to retest 64.24 low first. Break there will confirm that whole decline for 87.15 has resumed and should target next key level at 60, which is close to 50% retracement of 33.2 to 87.15 at 60.18. On the upside, above 75.72 will bring another rise, but after all, upside should be limited by 61.8% retracement of 87.15 to 64.23 at 78.39 and bring fall resumption.

In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Kevin Kiefer: Job Growth is Key to Recovery and Market

Friday's job numbers were very disappointing with private sector hiring declining significantly. What people need to understand is that there are enormous deflationary pressures in this economy and job growth is the only way to overcome those headwinds. Without strong job growth, this recovery and this stock market are both toast. The consumer and the private sector are continuing to deleverage and pay down debt....which is very deflationary but is a needed process in a system that had too much leverage. Even with the public debt soaring, total US debt (includes private and public debt) is declining.

We think this process will need to go on for many years with higher saving rates than what we have seen the past decade. Given this, the economy and the market can still do well if we have job growth to replace the aggregate demand lost due to the increase in savings. Also, after a few years of credit card debt going down, more income will be used to spend instead of interest payments which is a boost to the economy. As we have mentioned before, companies have cut to the bone and we believe that productivity can't go much higher in the short run so any increase in demand will lead to higher job growth than what we saw in May. We must watch the ISM and durable goods data to determine if demand is still increasing and if so, we expect much better private sector hiring in the months of June and July.

We are also still watching the 200 and 50 day moving averages on the S&P 500. We are well below both of these key moving averages with the 200 day at 1006 and the 50 day at 1154. It is very possible that the market may get a relief rally soon and we'll need to get a close above the 200 day moving average in order for us to put on more positions. If the economic data still points to demand increasing, then we should see the market get back above the key 200 day moving average quickly. Having said all of this, I am not selling or buying right now... and so I have no stock picks tonight. We'll need to keep a close eye on the economic data this month and on the charts and we'll let you know when it is safe to buy again or if it is time to sell all of our remaining positions.

I'm still a believer in this recovery... but if the market keeps hanging around below the 200 day and we can't get a close above it on the next leg higher, then I'll have to rethink that. Also, if the economic data starts coming in weaker than expected, then I'll also have to rethink that. We need good data this month to get the one thing we need to keep this economy and market going, JOBS.

Analyst Kevin Keifer can be reached at Kevin@tickerhouse.com

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Where is Crude Oil and Gold Headed on Tuesday?

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




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Crude Oil, Natural Gas, Gold and Dollar Commentary For Monday Evening

Crude oil closed down $0.54 at $70.97 a barrel today. Prices closed near mid range today. Bears have regained the near term technical advantage and have resumed a five week old downtrend on the daily bar chart. The next near term upside price objective for the bulls is producing a close above solid technical resistance at $76.00 a barrel.

Natural gas closed up 14.4 cents at $4.941 today. Prices closed near the session high today and closed at a fresh three month high close. Prices have seen a bullish upside "breakout" from a recent trading range at lower price levels. Recent price action suggests a major market low is in place in natural gas. Bulls have gained fresh upside near term technical momentum recently.

The U.S. dollar index closed up 23 points at 89.02 today. Prices closed near the session high today and hit a fresh 14 month high. European Union sovereign debt troubles will continue to support the dollar index. The bulls still have the solid overall near term technical advantage. There are still no early technical clues to suggest a market top is close at hand.

Gold futures closed up $23.10 at $1,240.80 today. Prices closed near the session high today on short covering and fresh speculative buying. There was a rumor that one big hedge fund was a major buying of gold with the Euro currency today. More safe haven buying interest in gold was also seen today. The gold bulls have the solid overall near term technical advantage and regained upside momentum today. There are still no early technical clues to suggest a market top is close at hand.


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