Oil N'Gold: Risk-Off Trades Dominate, Commodities Slump as USD Strengthens

Risk appetite remained weak in European session amid concerns about 'measured QE' policies. The dollar strengthened while growth currencies and other risk assets plunged. Aussie tumbled as inflation missed expectations. Focus in the US session will be on durable goods orders, new home sales and oil inventory data. Commodities fell across the board. The front month contract for WTI crude oil slipped below 82 ahead of official oil inventory report. Precious metals and base metals also slumped on profit taking.

The Wall Street Journal said that the Fed will likely announce a bond purchase program, worth a few hundred billion dollar spanning over several months, at the FOMC next week. The amount would be significantly lower than market expectations of at least $500B over 5 months. Investors took profits from previous 'short USD' trades as the selloff was probably over extended with such a 'small' amount of QE.

Currently trading at 0.9715, Australian dollar plummeted for a second day against the dollar as CPI surprisingly eased to +2.8% y/y in 3Q10 from +3.1% a quarter ago. This may prolong RBA's pause in tightening. Other commodity currencies, New Zealand and Canadian dollars also fell. The RBNZ will leave the official cash rate......Read the entire article.


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Crude Oil Technical Outlook For Wednesday Morning Oct. 27th

Crude oil was lower overnight as it consolidates some of the rebound off last week's low. However, stochastics and the RSI are turning bullish signaling that sideways to higher prices are still possible near term.

Closes above the reaction high crossing at 84.80 are needed to confirm that a short term low has been posted. If December renews last week's decline, trendline support drawn off the August-September lows crossing near 78.38 is the next downside target.

First resistance is Monday's high crossing at 83.28
Second resistance is the reaction high crossing at 84.80

Crude oil pivot point for Wednesday morning is 82.41

First support is last Wednesday's low crossing at 79.90
Second support is the uptrend line drawn off the August-September lows crossing near 78.38




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Crude Oil Snaps Three Day Gain on Strengthening Dollar, Rising Crude Stockpiles

Crude oil declined for the first time in four days as a strengthening dollar curbed investor demand for raw materials and traders bet stockpiles in the U.S. are rising. Futures dropped as much as 0.6 percent as the dollar climbed against all but one of its 16 most traded peers. An Energy Department report today may show crude inventories increased by 1 million barrels last week, according to a Bloomberg News survey of analysts. The American Petroleum Institute said yesterday stockpiles surged 6.43 million barrels.

“Oil continues to react to dollar movements,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “With seasonal maintenance and outages at refineries, I’d expect to see some build in crude stockpiles.” The December contract fell as much as 47 cents to $82.08 in electronic trading on the New York Mercantile Exchange, and was at $82.10 at 11:18 a.m. Singapore time. Yesterday it added 3 cents to $82.55. Futures are up 3.6 percent this year.

The dollar advanced after the U.S. Conference Board said yesterday consumer confidence climbed in October from a seven month low. The greenback rose 0.3 percent versus the euro and the yen. The Energy Department report at 10:30 a.m. in Washington today may show gasoline stockpiles rose by 625,000 barrels last week, according to the Bloomberg News survey. The industry funded API reported yesterday that supplies of the motor fuel slipped 1.81 million barrels......Read the entire article.



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Sharon Epperson: Where is Crude Oil and Gold Headed on Wednesday?

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.



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Stock Market and Commodities Commentary For Tuesday Evening Oct. 26th

The S&P 500 index closed lower due to profit taking on Tuesday as it consolidates some of Monday's rally but remains above the 87% retracement level of the April-July decline crossing at 1178.21. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought, diverging but are neutral to bullish signaling that additional short term gains are possible. If December extends the aforementioned rally, April's high crossing at 1203.00 is the next upside target. Closes below the 20 day moving average crossing at 1163.45 are needed to confirm that a short term top has been posted. First resistance is Monday's high crossing at 1193.00. Second resistance is April's high crossing at 1203.00. First support is the 10 day moving average crossing at 1175.99. Second support is the 20 day moving average crossing at 1163.45.

Crude oil closed higher on Tuesday as it consolidates some of the decline off this month's high. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are turning neutral to bullish signaling that a short term low might be in or is near. Closes above the reaction high crossing at 84.80 are needed to confirm that a low has been posted. Closes below the reaction low crossing at 79.90 are needed to confirm that a short term top has been posted. First resistance is last week's high crossing at 84.80. Second resistance is this month's high crossing at 85.08. First support last week's low crossing at 79.90. Second support is the August-September uptrend line crossing near 78.33.

Natural gas closed higher on Tuesday due to short covering as it consolidated some of this year's decline. Stochastics and the RSI are oversold, and are turning neutral to bullish hinting that a low might be in or is near. Closes above the 20 day moving average crossing at 3.961 are needed to confirm that a short term low has been posted. If December extends this year's decline, weekly support crossing at 3.390 is the next downside target. First resistance is the 10 day moving average crossing at 3.851. Second resistance is the 20 day moving average crossing at 3.961. First support is Monday's low crossing at 3.500. Second support is weekly support crossing at 3.390.

Gold closed higher due to short covering on Tuesday as it consolidates some of this month's decline. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices is possible near term. If December extends this month's decline, the 25% retracement level of this year's rally crossing at 1303.50 is the next downside target. Closes above the 10 day moving average crossing at 1350.10 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 1350.10. Second resistance is this month's high crossing at 1388.10. First support is last Friday's low crossing at 1315.60. Second support is the 25% retracement level of this year's rally crossing at 1303.50.

The U.S. Dollar closed higher due to short covering on Tuesday and the high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish hinting that a short term low might be in or is near. Closes above the reaction high crossing at 78.61 are needed to confirm that a short term low has been posted. If December extends the decline off August's high, the November 2009 low on the weekly continuation chart crossing at 74.21 is the next downside target. First resistance is today's high crossing at 78.04. Second resistance is the reaction high crossing at 78.61. First support is last Friday's low crossing at 75.85. Second support is the November 2009 low on the weekly continuation chart crossing at 74.21.



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Phil Flynn: French Press

Oil prices got a boost from the beleaguered dollar but word that the Strikes in France may be winding down may have taken away some of the upside allure. Oil prices broke after Bloomberg News reported that Workers at Fos-sur-Mer and Port Jerome-Granvenchon, two Exxon Corp. refineries in France that have been on strike for 10 days, have voted to return to work, Jean-Michel Maton, a representative of the CFDT union, said by telephone. The French Strikes have led to larger than expected US exports of Diesel as reports of tankers being destined for Europe have been making the rounds.

Still the Dollar seems to be the major factor for oil and the price break from France may be offset if the dollar renews its assault on the downside. Still the big news overnight was some strong data out of the UK. MarketWatch reported that the” British economy grew by 0.8% in the third quarter, easing from the previous quarter’s pace but defying forecasts for a sharper slowdown and dampening expectations the Bank of England will soon implement a further round of monetary easing. The Office for National Statistics said third-quarter gross domestic product expanded......Read the entire article.


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Major Oil & Energy Earnings On Deck

This is the peak of earnings season and the flow of earnings is coming on strong. This week is jammed full of energy companies reporting earnings and it will be interesting to see how these companies compare against last year’s earnings and after the September rise in oil prices. Of the integrated oil giants, we have ConocoPhillips (NYSE: COP), Exxon Mobil Corporation (NYSE: XOM), and Chevron Corp. (NYSE: CVX) this week. Solar is far from being a true energy sector of yet in the grand scheme of things when you see how little of the overall energy comes from it, but industry leader First Solar, Inc. (NASDAQ: FSLR) is on deck this week.

We have compiled the Thomson Reuters earnings estimates, shown price ranges and performance relevance and added in color on each where applicable. We have also added in the oil and gas ETF performance in the ProShares Ultra Oil & Gas (NYSE: DIG) for a comparison on how each has performed.

ConocoPhillips (NYSE: COP) reports its oil earnings Wednesday morning. Thomson Reuters has estimates for the oil giant of $1.45 EPS and $45.59 billion in revenues. Estimates for the quarter ahead are $1.36 EPS and $46.99 billion in revenues. With shares at $61.34, the stock just hit a new 52 week high of $61.88 on Friday and hit a new 52 week high on Monday of $62.63. The market cap here is $91.3 billion and the average analyst price target is $62.00. Shares are up more than 10% from the August lows......Read the entire article.



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Crude Oil Daily Technical Outlook For Tuesday Morning Oct. 26th

Crude oil was higher overnight as it extends Monday's rally above the 10 day moving average crossing at 82.29. Stochastics and the RSI are turning bullish following Monday's rally signaling that sideways to higher prices are still possible near term.

Closes above the reaction high crossing at 84.80 are needed to confirm that a short term low has been posted. If December renews last week's decline, trendline support drawn off the August-September lows crossing near 78.28 is the next downside target.

First resistance is Monday's high crossing at 83.28
Second resistance is the reaction high crossing at 84.80

Crude oil pivot point for Tuesday morning is 82.42

First support is last Wednesday's low crossing at 79.90
Second support is the uptrend line drawn off the August-September lows crossing near 78.28


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Crude Oil Declines as Forecast Gain in U.S. Inventories Signals Slowing Demand

Crude oil declined in New York on speculation slowing fuel demand will result in higher inventories in the U.S., the world’s largest crude consumer. Futures earlier dropped as much as 0.6 percent as the dollar index gained, limiting the investment appeal of commodities. An Energy Department report tomorrow may show crude inventories rose 1.5 million barrels last week, according to a Bloomberg News analyst survey. “If you look at the inventory expectations, crude supplies should climb, so fundamentally there’s not much support,” said Serene Lim, an energy and commodity strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “The market will be determined by the price moves in the dollar.”

The December contract fell as much as 47 cents to $82.05 a barrel in electronic trading on the New York Mercantile Exchange and was at $82.20 at 2 p.m. in Singapore. Yesterday, it advanced 83 cents to $82.52, the highest close since Oct. 18. Prices are up 3.6 percent this year. Workers at three French oil refineries voted to return to work as a contested pension bill neared parliamentary approval and the government warned that fuel shortages were hurting the economy. The nation’s eight remaining active plants are either on strike or shut because of a lack of crude. The dollar traded at $1.3972 against the euro from $1.3965 in New York yesterday, having earlier risen to $1.3908. The dollar index, which tracks the greenback against six major currencies, rose as much as 0.3 percent, and was little changed at 77.091 from 77.103 yesterday.

Strikes ‘Psychological’
“The oil market might be taking a bit of a breather,” said ANZ’s Lim. “I doubt the strikes had a huge effect overall on the market, but it was more a psychological impact from the shutdowns.” U.S. gasoline supplies probably climbed by 625,000 barrels last week, according to the estimates in the Bloomberg survey. Supplies of distillate fuel probably decreased for a fifth week as distributors took deliveries before winter and exports to Europe increased, the Bloomberg News survey shows. Brent crude for December settlement traded at $83.34 a barrel, down 20 cents, on the ICE Futures Europe exchange in London. Yesterday it rose 58 cents, or 0.7 percent, to $83.54.

Bloomberg Reporter Christian Schmollinger can be contacted at christian.s@bloomberg.net


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Commodity Corner: Crude Oil Rises on Dollar Decline

The price of a barrel of crude oil for December delivery settled at $82.52 Monday, a 83 cent increase from the previous session. The increase stems largely from the weakening of the U.S. Dollar, which fell 0.34% against the euro Monday. Pending Federal Reserve action to increase the U.S. money supply in order to buy more federal government debt has placed downward pressure on the dollar. A weaker dollar tends to boost demand for oil from buyers holding other currencies.

Contributing to the bullish sentiment for oil was a report showing that existing home sales in the U.S. increased 10% last month. According to the National Association of Realtors, a housing recovery is occurring albeit in the early stages. An official with the trade group said the duration and impact of a foreclosure moratorium will influence how "choppy" the recovery will be. December crude traded from $81.45 to $83.28 Monday.

Milder than normal temperatures in typically heating depending U.S. regions such as the Northeast and Midwest have quashed demand for natural gas recently. Monday was no exception to this trend, with November natural gas settling a penny lower at $3.32 per thousand cubic feet. The front month gas price fluctuated between $3.29 and $3.40.

Labor unrest at French refineries and fuel depots is expected to reduce gasoline exports to the U.S. market. As a result, November gasoline futures rose two cents to settle at $2.08 a gallon. Gasoline peaked at $2.10 and bottomed out at $2.05.

Coutesy of Rigzone.Com


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