Oil N'Gold: Crude Oil Weekly Technical Outlook For Saturday Oct. 23rd

Crude oil continued to engage in choppy sideway trading last week and spiraled lower. But after all, downside is still contained above 78.04 resistance and there is no confirmation of reversal yet. Recent rally might still extend one more time. But after all, even in case of another rise, we'll continue to focus on reversal signal inside resistance zone of 82.97/87.15. On the downside, break of 78.04 support will indicate that rise from 70.76 is over and deeper decline should be seen to retest this support level first.

In the bigger picture, after all, we're still favoring the case that medium term rally from 33.2 is already completed at 87.15. Recovery from 64.23 is treated as a correction and should be near to completion, if not finished. Even in case of another rise, strong resistance should be seen as crude oil enters into resistance zone of 82.97/87.15 and bring reversal. We're still expecting another fall to 60 psychological level (50% retracement of 33.2 to 87.15 at 60.18). However, decisive break of 87.15 will put focus on long term fibo level at 50% retracement of 147.27 to 33.2 at 90.24.

In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Price actions from 147.27 are treated as consolidation in the larger up trend and with 90.24 fibo resistance intact, a test of 33.2 eventually is in favor. Though, decisive break of 90.24 will argue that crude oil will bring stronger rally to above 100 psychological level as a relatively powerful second wave of the consolidation continues.

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Lind-Waldock: Crude Oil Poised to Reach $90 a Barrel

Crude oil is poised to reach $90 a barrel by the middle of December, according to technical analysis by Lind-Waldock in Chicago. The December contract, which became the front month contract yesterday, has been trading in an uptrend, a pattern of higher peaks and higher valleys, since touching a low of $75.10 on Sept. 23, Blake Robben, a strategist at Lind-Waldock, a division of MF Global Ltd., said in an interview.

“Since then, the market has made higher highs and higher lows,” Robben said. A line drawn from the Sept. 23 low to the Oct. 20 low of $79.90 projects to $90 by the middle of December, he said. The initial target for the rising price is $86.52, the high on May 13, which may be reached by the middle of November, Robben said.

“If we close below $79.90, the uptrend is over and we’re back in a trading range of $75 to $85,” he said. Crude oil for December delivery settled at $80.56 a barrel yesterday on the New York Mercantile Exchange.

Bloomberg reporter Barbara Powell can be reached at Bpowell4@bloomberg.net.


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China's Oil Demand Rises on Year On Year Basis

China's apparent oil demand in September rose 5.1% year on year to 35.53 million metric tons (mt) or an average of 8.68 million b/d, according to Platts' analysis of data from the People's Republic of China. However, September demand is almost unchanged from August's 35.54-million-mt level. Meanwhile, China's apparent oil demand in the first nine months of the year totaled 317.7 million mt or an average of 8.52 million b/d, up 10.25% from the same period of 2009, according to Platts' data.

Chinese refiners processed a total 34.91 million mt or an average 8.53 million b/d of crude in September. This is up 6.35% from a year ago, but just 0.52% higher than August, according to data released by the country's National Bureau of Statistics on Oct. 21. The refiners' collective crude throughput from January to September was 310.74 million mt, 13.48% higher from a year ago. Chinese crude imports in September hit a new historic high of 23.29 million mt, or around 5.7 million b/d.

"The crude available to China in September, including domestic production and net imports, was 40.09 million mt, but the throughput was only 34.91 million mt. So a little over 5 million mt of crude presumably went into storage, the highest in a month so far this year," said Vandana Hari, Asia editorial director at Platts. "At the same time, China's monthly refined product imports continued to come off June's high of 3.64 million mt, while the country stepped up product exports last month. The flattening of implied oil demand in September could be a precursor to an easing of the country's runaway oil demand growth rate for the remainder of 2010."

Courtesy of Rigzone.Com



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Phil Flynn: Project China

In futures, one day you are in and the next day you are out. Oil traders wanted data from China to wow them but that failed. The oil bulls have all of their hopes and aspirations tied up into expectations of strong China demand and when they fail to blow us away, well the bulls have to leave the runway.

China GDP number just barely met or exceeded market expectations and for a market that lives or dies on China surprising us, it just was not enough. It bored us. At the same time in the aftermath of the Chinese’s government increasing interest rates the higher than expected 3.6 percent rise in the Chinese Consumer Price index should increase the odds that we will see more moves by the Chinese to try to reign in what they are starting to see as an inflation problem.

Oil bulls also had to be dismayed by the fact that despite the fact that the Chinese imported a record amount of crude last month, it seems it went into storage as opposed to the refinery. Data from the China Mainland Marketing Research Company showed that China processed 8.5 million barrels of oil a day which according to Bloomberg News was the smallest increase since March of 2009. A sign that demand may already be......Read the entire article.


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Zacks: Haliburton a Near Term Buy?

Earlier this week, major oilfield services provider Halliburton Co. (HAL) announced its financial results for the quarter ended September 30, 2010. Now that the analysts have had some time to digest the quarterly performance, they are weighing in with their estimate revisions. Below we cover the results of the recent earnings announcement, subsequent analyst estimate revisions and Zacks ratings for the stock.

Earnings Review
Halliburton's better than anticipated third quarter 2010 results were helped by the strength in the all important North American onshore activity levels (to which the company is heavily exposed through its market share leading pressure pumping business). Earnings per share, excluding special items, came in at 58 cents, beating the Zacks Consensus Estimate of 56 cents and were comfortably ahead of the year ago adjusted profit of 31 cents.

Revenues of $4.7 billion, 30% above the third quarter of 2009, also surpassed the Zacks Consensus Estimate of $4.6 billion, as sales increased across the company’s business units. During the quarter, North America accounted for approximately 51% of Halliburton’s total revenues and 65% of its operating income.

Agreement of Estimate Revisions
There is a strong positive agreement among the analysts regarding Halliburton’s outlook. In particular, we see a notable number of estimate revisions over the past 7 days, indicating that the revisions were in response to the company’s third quarter earnings release. Out of 33 analysts covering the stock, 23 have revised their estimates for 2010 upward, while 5 have gone in the opposite direction. Looking forward to 2011, the trend is more or less similar. Out of 33 analysts, 22 hiked their estimates compared to just one negative revision. Estimates are up for the December quarter of 2010 as well. For the current quarter, 21 of the 29 analysts have increased their estimates over the last 7 days, against 5 downward revisions.

Magnitude of Estimate Revisions
As a result of the analysts revising estimates over the past 7 days, the Zacks Consensus Estimates for fiscal 2010 and 2011 have gone up 5 cents (from $1.94 to $1.99) and 13 cents (from $2.49 to $2.62), respectively. Meanwhile, the estimate for the December 2010 quarter is up by 3 cents. The increases are based on the expectations of bullish near-term U.S. land drilling trends, where activity is being driven by oil and liquids-rich plays. This will make the reduction in gas activity less meaningful. Halliburton will continue to be a beneficiary of the bullish rig count fundamentals in the U.S., driven by horizontal drilling in the service intensive plays.

Our Recommendation
Halliburton currently has a Zacks #2 Rank (short-term 'Buy' rating). In the near term, the company is likely to benefit from bullish U.S. land drilling trends, where activity is tracking above expectations. However, new environmental regulations for hydraulic fracturing in the shale plays, the intensely competitive nature of the market, and depressed natural gas prices will continue to overhang the stock during the longer-term, accounting for our Neutral recommendation.

Courtesy of  Zack.com


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Crude Oil Bears Appear to Have a Clear Near Term Advantage, Here's Fridays Numbers

Crude oil was higher due to short covering overnight but remains below the 20 day moving average crossing at 81.78. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If December extends this week's decline, trendline support drawn off the August-September lows crossing near 78.10 is the next downside target. Closes above the reaction high crossing at 84.80 are needed to confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 81.78
Second resistance is the 10 day moving average crossing at 82.25

Crude oil pivot point for Friday morning is 81.12

First support is Wednesday's low crossing at 79.90
Second support is the uptrend line drawn off the August-September lows crossing near 78.10


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Bloomberg: Crude Oil Rises as Reports Show Improved U.S. Economic Outlook

Crude oil climbed in New York after reports showed improvement in the U.S. economy, raising investor expectation fuel demand will increase. Futures retraced some of yesterday’s 2.4 percent decline as Asian equity markets gained following data showing jobless claims fell in the world’s largest economy. The New York based Conference Board’s index of leading economic indicators climbed 0.3 percent, matching the forecast of economists surveyed by Bloomberg News.

“For the short term, the positive economic indicators should support the prices,” said Tetsu Emori, a commodity fund manager at Astmax Ltd. in Tokyo. “Fundamentals aren’t what people are looking at for the market but currencies and financial market conditions.” The December contract added as much as 60 cents, or 0.7 percent, to $81.16 a barrel in electronic trading on the New York Mercantile Exchange, and was at $81.05 at 11:55 a.m. Singapore time. Yesterday it lost $1.98 to $80.56. The contract has fallen 1 percent this week.

Oil also rose as Labor Department figures yesterday showed U.S. initial jobless claims dropped by 23,000 to 452,000 in the week ended Oct. 15. Chinese crude production gained 9 percent in September, the National Bureau of Statistics said Oct. 21. Oil refining reached 8.5 million barrels a day last month, China Mainland Marketing Research Co. said......Read the entire article.



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Commodity Corner: Crude Falls as Dollar Rebounds

Crude futures fell Thursday as economic worries resurfaced and the dollar rebounded against the euro. Oil prices for December delivery settled at $80.56 a barrel, down 2.4 percent from the previous day. Prices continued to feel the ripple from China's decision Tuesday to increase interest rates. As the Chinese government reported, projected third quarter gross domestic product growth fell to 9.6 percent from a 10.3 percent growth rate in the second quarter.

The second largest oil consumer after the U.S., China, is estimated to account for approximately 40 percent of an expected 2.1 million barrel per day increase in global oil demand this year and approximately one third of a 1.2 million-b/d increase next year, according to the International Energy Agency. The dollar rose 0.3 percent against the euro Thursday after falling earlier as much as 0.6 percent. Light, sweet crude futures traded between $80.09 and $82.70.

Likewise, natural gas futures plummeted to new 13-month lows Thursday. Henry Hub natural gas decreased 4.8 percent and settled at $3.37 per thousand cubic feet. The U.S. Energy Information Administration (EIA) reported that natural gas inventories grew by 93 billion cubic feet last week, marking the sixth consecutive above average weekly build. According to the inventory report, the U.S. had 3.68 trillion cubic feet of natural gas in underground storage last week.

The National Hurricane Center observed a tropical storm headed toward Mexico's Yucatan Peninsula Thursday. The system, Tropical Storm Richard, formed in the northwestern Caribbean Sea. Meteorologists predict that the storm may continue into the Gulf of Mexico, but major impact should be prevented by the high wind shear. The intraday range for natural gas was $3.35 to $3.54 Thursday. November delivery gasoline prices settled at the lowest point since Sept. 29 at $2.04 a gallon, after peaking at $2.08 and bottoming out at $2.03.

Courtesy of Rigzone.Com


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Markets Close Mixed as Commodity Bulls Fight The Stronger Dollar

The U.S. stock indexes closed mixed today. The stock index bulls still have the overall near term technical advantage as price uptrends are still in place on the daily bar charts. Stock index bulls have been very pleased with price action so far this autumn, a time which is normally not favorable to market bulls. My bias is that prices will trade mostly sideways, but with a slight upside bias, into the end of the year.

Crude oil closed down $1.91 at $80.63 a barrel today. Prices closed nearer the session low today. A rebounding U.S. dollar pressed the crude market lower today. Trading has turned very choppy. Bulls and bears are on a level near term technical playing field.

Natural gas closed down 13.3 cents at $3.76 today. Prices closed nearer the session low today and prices hit another fresh contract low. The bears have the solid overall near term technical advantage.

Gold futures closed down $19.70 at $1,324.50 today. Prices closed near the session low today and hit a fresh two week low. Profit taking, a firming U.S. dollar index and lower crude oil prices combined to pressure gold today. Prices also scored a bearish "outside day" down on the daily bar chart, whereby the high was higher and low was lower than the previous session's trading range, with a lower close. Some near term technical damage was inflicted today as a 2 1/2 month old uptrend on the daily bar chart was at least temporarily negated today to begin to suggest that a near term market top is in place. Bulls do still have the overall near term and longer term technical advantage, but have faded this week and need to show fresh power soon.

The U.S. dollar index closed up 27 points at 77.69 today. Prices closed near the session high today and saw short covering in a bear market. Dollar index bears still have the overall near term technical advantage.


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