CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil and gold are likely headed tomorrow.
Tuesday, September 14, 2010
Stock Market and Commodities Summary For Tuesday Sept. 14th
Crude oil closed down $0.41 at $76.78 a barrel today. Prices closed near mid range today and saw a corrective pullback from recent gains and were also pressured by some weak economic data coming out of Germany. Bulls still have the slight near term technical advantage. The next near term upside price objective for the bulls is producing a close above solid technical resistance at $80.00 a barrel.
Natural gas closed up 1.7 cents at $3.955 today. Prices closed nearer the session high today and hit another fresh three week high on short covering in a bear market. The bears still have the overall near term technical advantage. A three month old downtrend is still in place on the daily bar chart.
Gold futures closed up $24.90 at $1,272.00 today. Prices closed near the session high today and soared to a fresh contract and all time record high. A sharply lower U.S. dollar and some fresh safe haven investment demand boosted gold higher today. A dour economic report coming out of Germany today spooked the markets in Europe, and that added to buying interest in gold. Now, look for price volatility in the gold market to heat up in the near term, with bigger daily price movements likely, both on the upside and on the downside. Gold bulls still have the strong overall near term and longer term technical advantage.
The U.S. dollar index closed down 72 points at 81.46 today. Prices closed near the session low again today and hit another fresh four week low. Bears have the near term technical advantage and gained more downside momentum today. Bulls' next upside price objective is to close prices above solid technical resistance at last week's high of 83.31.
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Phil Flynn: OPEC Divisions
The Globe and Mail quoted him as saying, "We believe that the market has bottomed in terms of demand and has already begun picking up," he said. "And Saudi Aramco will be responding to the economic recovery that has ensued with appropriate adjustments. But those will be determined collectively and not singly, either by the company or by the kingdom." Of course when the Saudis speak the market listens yet at the same time are they sending a message to other members of the cartel that the kingdom is tired of holding back on production while others profit by taking their market share. Early this morning the OPEC Secretary said in so many words.....Read the entire article.
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Crude Oil Retreats Along With Equities as Economic Data Disappoints
From Oil N Gold Insights.....
Crude oil pulled back in concert with stock markets. Political environment in Japan and economic releases in the UK and the Eurozone took center stage in driving market sentiment. Currently trading at 76.7, the front month WTI contract retreated for the first time in 3 days after soaring to a 1 month high of 78.04 yesterday. Weakness in USD sent precious metals higher. Gold climbed to as high as 1256.9 while silver continued trading above 20. For PGMs, both platinum and palladium strengthened for a second day to 5 week high of 1570 and 4 month high of 541 respectively.
In Japan, Prime Minister Naoto Kan's victory as the head of the ruling Democratic Party of Japan (DPJ) pushed the yen to a 15 year high against the dollar. Kan has been viewed as more tolerant to yen's appreciation than another PM candidate Ichiro Ozawa.
In the Eurozone, ZEW's index signaled investors lost confidence on Eurozone's economy. The 'economic sentiment' index for the 16-nation region plummeted to 4.4 in September from 15.8 in August. The market had anticipated a milder drop to 14.5. The reading specifically for Germany slumped to -4.3 in August from 14 a month ago. In the UK, headline CPI surprisingly rose to +3.1% y/y in August. Inflation has been overshooting BOE's target of +3% for 6 straight months, increasing the difficulties for the central bank to implement measures to stimulate growth.
Gold/silver ratio has dropped to 62.2 yesterday from 64.4 earlier in the month and above 70 earlier this year, indicating silver's outperformance. However, we have become more cautious of a correction in silver price from current price level. In fact, silver is the only precious metal under our coverage that is oversupplied due to rising mine production.
PGM prices rallied as a labor strike at the South African PGM producer Northam Platinum entered a second week. According to the company, about 80% of the mine's 6 800 workers were on the strike.
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Crude oil pulled back in concert with stock markets. Political environment in Japan and economic releases in the UK and the Eurozone took center stage in driving market sentiment. Currently trading at 76.7, the front month WTI contract retreated for the first time in 3 days after soaring to a 1 month high of 78.04 yesterday. Weakness in USD sent precious metals higher. Gold climbed to as high as 1256.9 while silver continued trading above 20. For PGMs, both platinum and palladium strengthened for a second day to 5 week high of 1570 and 4 month high of 541 respectively.
In Japan, Prime Minister Naoto Kan's victory as the head of the ruling Democratic Party of Japan (DPJ) pushed the yen to a 15 year high against the dollar. Kan has been viewed as more tolerant to yen's appreciation than another PM candidate Ichiro Ozawa.
In the Eurozone, ZEW's index signaled investors lost confidence on Eurozone's economy. The 'economic sentiment' index for the 16-nation region plummeted to 4.4 in September from 15.8 in August. The market had anticipated a milder drop to 14.5. The reading specifically for Germany slumped to -4.3 in August from 14 a month ago. In the UK, headline CPI surprisingly rose to +3.1% y/y in August. Inflation has been overshooting BOE's target of +3% for 6 straight months, increasing the difficulties for the central bank to implement measures to stimulate growth.
Gold/silver ratio has dropped to 62.2 yesterday from 64.4 earlier in the month and above 70 earlier this year, indicating silver's outperformance. However, we have become more cautious of a correction in silver price from current price level. In fact, silver is the only precious metal under our coverage that is oversupplied due to rising mine production.
PGM prices rallied as a labor strike at the South African PGM producer Northam Platinum entered a second week. According to the company, about 80% of the mine's 6 800 workers were on the strike.
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Short Term Buy Signal on Gold!
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Crude Oil Is Little Changed as Enbridge Works on Pipeline
“We are all waiting to see what happens with the Enbridge pipeline,” said Carl Larry, president of Oil Outlooks and Opinions LLC in Houston. “Any news that comes out will have the ability to move the market.” Crude oil for October delivery fell 9 cents to $77.10 a barrel at 9:11 a.m. on the New York Mercantile Exchange. Futures settled at $77.19 yesterday, the highest level since Aug. 11.
Brent crude oil for October settlement, which expires tomorrow, slipped 5 cents to $78.98 a barrel on the ICE Futures Europe exchange in London. The more actively traded November contract dropped 13 cents to $78.94. Canada is the largest exporter of crude to the U.S., sending 2.2 million barrels a day in June, according to the Energy Department. Refiners in the region may obtain supplies from Cushing, Oklahoma, the Midwest oil-storage hub, driving up futures traded in New York.
From Bloomberg News
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Crude Oil Support, Resistance and Pivot Point Numbers For Tuesday Morning
Crude oil was lower overnight as it consolidates some of the rally off August's low. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.
If October extends the rally off August's low, the 62% retracement level of the decline off August's high crossing at 78.58 is the next upside target. Closes below the 20 day moving average crossing at 74.48 would confirm that a short term top has been posted.
First resistance is Monday's high crossing at 77.50
Second resistance is the 62% retracement level off August's high crossing at 78.58
Crude oil pivot point for Tuesday morning is 77.20
First support is the 20 day moving average crossing at 74.48
Second support is the reaction low crossing at 72.63
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If October extends the rally off August's low, the 62% retracement level of the decline off August's high crossing at 78.58 is the next upside target. Closes below the 20 day moving average crossing at 74.48 would confirm that a short term top has been posted.
First resistance is Monday's high crossing at 77.50
Second resistance is the 62% retracement level off August's high crossing at 78.58
Crude oil pivot point for Tuesday morning is 77.20
First support is the 20 day moving average crossing at 74.48
Second support is the reaction low crossing at 72.63
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Monday, September 13, 2010
Where is Crude Oil and Gold Headed on Tuesday?
CNBC's Bertha Coombs discusses the day's activity in the commodities markets, and looks ahead to where oil and gold are likely headed tomorrow.
Stock Market and Commodities Commentary For Monday Evening
Crude oil closed higher on Monday as it extends the rally off August's low. Profit taking tempered early gains and 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 October extends the rally off August's low, the 62% retracement level of the August decline crossing at 78.58 is the next upside target. Closes below the 20 day moving average crossing at 74.43 would temper the near term friendly outlook. First resistance is today's high crossing at 78.04. Second resistance is the 62% retracement level of the August decline crossing at 78.58. First support the 20 day moving average crossing at 74.43. Second support is August's low crossing at 70.76.
Natural gas closed higher due to short covering on Monday while extending the trading range of the past three weeks. The mid range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are neutral to bullish hinting that a short covering rebound is possible near term. Closes above the 20 day moving average crossing at 3.973 are needed to confirm that a short term low has been posted. If October renews this year's decline, weekly support crossing at 3.225 is the next downside target. First resistance is the reaction high crossing at 3.946. Second resistance is the 20 day moving average crossing at 3.973. First support is August's low crossing at 3.697. Second support is weekly support crossing at 3.225.
Gold closed lower due to profit taking on Monday and below the 10 day moving average crossing at 1248.80 signaling that a short term top might be in or is near. Stochastics and the RSI are overbought, diverging and are turning bearish hinting that additional profit taking is possible near term. Closes below the 20 day moving average crossing at 1240.20 would confirm that a double top with June's high has been posted. If October renews the rally off July's low, June's high crossing at 1267.10 is the next upside target. First resistance is last Wednesday's high crossing at 1263.20. Second resistance is June's high crossing at 1267.10. First support is the 20 day moving average crossing at 1240.20. Second support is the reaction low crossing at 1232.40.
The U.S. Dollar closed sharply lower on Monday and below trading range support crossing at 82.23. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are diverging and are turning neutral signaling that sideways to lower prices are possible near term. If December extends the decline off August's high, August's low crossing at 80.75 is the next downside target. If December renews the rally off August's low, the reaction high crossing at 84.94 is the next upside target. First resistance is last Tuesday's high crossing at 83.29. Second resistance is August's high crossing at 83.96. First support is today's low crossing at 82.02. Second support is August's low crossing at 80.75.
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Commodity Corner: Oil Gets Boost from China, Pipeline Closure
The October crude oil futures price increased by nearly 1% Monday on news about China's industrial production growth rate.
Oil settled at $77.19 a barrel, a 74-cent increased from Friday, after the National Bureau of Statistics of China reported the country's August 2010 industrial production rate was 13.9% higher than the comparable figure for August 2009. Broken down by various sectors, the government agency reported year on year increases of 12.9% in raw chemical material and chemical product manufacturing; 20.1% in transport equipment manufacturing; and 14.9% in the production and supply of electricity, gas, and water.
Also supporting the oil futures price Monday was the ongoing closure of a key segment of Enbridge's Lakehead System near Chicago following a leak reported last Thursday. Enbridge announced Monday that it had recovered all but approximately 50 of the 6,100 barrels of crude that had leaked from the pipeline. The company had no current estimate of when it might restart the line, but it was working with shippers to divert crude oil volumes to other available pipelines and storage facilities.
Oil traded within a range from $76.36 to $78.04 Monday.
A suddenly active Atlantic hurricane season, and the possibility that energy infrastructure in the Gulf of Mexico will be in the path of a tropical system, helped to nudge the natural gas price toward $4.00 Monday. Gas for October delivery settled at $3.94 per thousand cubic feet, a six-cent gain from Friday, with the existence of three systems circulating in the tropics. In the west-central Caribbean, a broad, poorly organized low-pressure system was moving west-northwestward Monday afternoon. The National Hurricane Center was giving the system a medium chance (40%) of developing into a tropical cyclone by Wednesday afternoon.
Out in the mid-Atlantic, Hurricane Igor was packing maximum sustained winds of 150 miles per hour late Monday morning. Forecasters were expecting the storm to follow a northwestward track and become centered approximately 500 miles northeast of the Lesser Antilles by Thursday morning. Another system, Tropical Storm Julia, was churning near the Cape Verde Islands Monday afternoon and moving in a west-northwestward direction at 13 miles per hour. Thanks in part to shearing conditions produced by Igor, forecast models anticipate that Julia will become a low end hurricane and then weaken into a tropical storm.
The October natural gas futures price fluctuated from $3.80 to $3.97. Gasoline futures increased by a penny to settle at $1.98 a gallon Monday. The intraday range for gasoline was $1.97 to $2.01.
From Rigzone.Com
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