Rigzone: Greece to Invite Crude Oil Exploration in January

Greece in January will invite offers for oil exploration off its western shores in the hopes of tapping reserves of some 280 million barrels, the junior energy minister said Thursday.

Yiannis Maniatis said the cabinet had approved drilling in the gulf of Patras, the sea region west of Ioannina and Katakolo off the Peloponnese coast, the semi state Athens News Agency reported.

"It is the first time Greece is taking such a step, and it will be done in complete transparency," Maniatis said according to the agency.

A contractor is expected to be appointed within a year.

The gulf of Patras is thought to hold some 200 million barrels of crude oil, while another 80 million barrels are believed to lie near Ioannina and another three million near Katakolo.

The cash strapped Greek state, which is struggling to escape default, could draw up to EUR14 billion over the next 15 years, ANA said.


Posted courtesy of Rigzone.Com

Oil N' Gold: Drop in Crude Inventory Fails to Alter the Downtrend

Total crude oil and petroleum products stocks declined -4.63 mmb to 1074.56 mmb in the week ended September 30. Crude stockpile fell -4.68 mmb to 336.28 mmb as 3 out of 5 PADDs recorded stock draws and Gulf Coast inventory plunged -5.24 mmb. Cushing stock also fell -0.83 mmb to 30.09 mmb. Utilization rate fell -0.1% to 87.7%.

Gasoline inventory dropped -1.14 mmb to 213.72 mmb although demand slipped -0.06% to 8.989M bpd. Imports dropped -6.65% to 0.51M bpd while production edged up +0.08% to 9.29M bpd during the week. Distillate inventory slipped -0.74 mmb to 156.93 mmb as demand jumped +7.39% to 4.10M bpd. Production gained +2.37% to 4.67M bpd while imports soared +36.67% to 0.21M bpd during the week.

WTI crude oil price rebounded to 78.84 after the report as crude inventory surprisingly fell. Distillate and gasoline stockpiles were also down during the week. However, the near-term outlook remained dismal amid global economic concerns and worries about European sovereign crisis.


A Comparison between API and EIA reports at Oil N' Gold


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Crude Oil, Natural Gas and Gold market Commentary For Thursday Oct. 6th

Crude oil was higher overnight due to short covering as it rebounds off Monday's low. 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 83.64 are needed to confirm that a short term low has been posted. If November extends this year's decline, the 75% retracement level of the 2009-2011 rally crossing at 72.20 is the next downside target.

First resistance is the 20 day moving average crossing at 83.64. Second resistance is the reaction high crossing at 84.77. First support is Monday's low crossing at 74.95. Second support is the 75% retracement level of the 2009-2011 rally crossing at 72.20. Crude oil pivot point for Thursday morning trading is 78.84.

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Natural gas was lower overnight as it extends the decline off June's high. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If November extends the aforementioned decline, monthly support crossing at 3.225 is the next downside target. Closes above the 20 day moving average crossing at 3.826 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 3.707. Second resistance is the 20 day moving average crossing at 3.826. First support is the overnight low crossing at 3.531. Second support is monthly support crossing at 3.225. Natural gas pivot point for Thursday morning is 3.605.

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December gold was higher in overnight trading as it extends the trading range of the past seven days. Stochastics and the RSI have turning bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 1718.60 are needed to confirm that a short term low has been posted. If December renews this month's decline, the 38% retracement level of the 2008-2011 rally crossing at 1476.20 is the next downside target.

First resistance is Monday's high crossing at 1681.50. Second resistance is the 20 day moving average crossing at 1718.60. First support is last Monday's low crossing at 1535.00. Second support is the 38% retracement level of the 2008-2011 rally crossing at 1476.20. Gold pivot point for Thursday morning is 1629.00.


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Phil Flynn: Dreariness And Downgrades

Ben Bernanke bank downgrades and unrest in Saudi Arabia. You know things are bad when the market seems to be relieved that Italy was downgraded. Is that all? Such is the fate of the global oil market that is now living and dying with the wild mood swings of perception on the outlook for the stability of the global economy. Stories that oil traders use to live and die with somehow seem not to matter quite as much.

Oil prices took out the low for the year just to spite me but is rebounding as global stock markets try to rebound. If there is a sense of economic stability, oil prices may focus on some of the things that might have rallied us yesterday. The market that is fighting fear and seasonal weakness was able to ignore reports of riots in Saudi Arabia and some bullish American Petroleum Institute data.

You know the market seems comfortable with the supply side when unrest in Saudi Arabia only seems to barley register on price. Had this happened just a few months ago, oil might have rallied $5 or $10 a barrel or more. A Shiite uprising in the oil producing Eastern Provence led to injuries to at least 11 Saudi Arabian security forces and the Saudis are inferring that perhaps Iran is to blame. The Iranians would love to cause chaos in Saudi Arabia as the Iranian regime is becoming a greater threat to the region.

Maybe that proves that money can't buy you love or security as the Saudis have spent big bucks trying to make the discontented happy. Of course when you have the scourge of Iran trying to foster unrest and instability in the region it does not help. Now that the OPEC crude oil basket fell below $100 a barrel for the first time since the beginning of the Libyan uprising, perhaps they may have to find other ways to buy love.

The API added some bullish support with numbers that surprised the most bullish among us. The market should be shocked as the API reported a 3.07 million barrel drop in crude supply and a whopping 4.97 barrel drop in gasoline supply. To round off the bullish report we saw a 1.97 million barrel drop in distillates. These are the type of numbers that should give us a short term bottom unless we get the feeling that we will see a disorderly Greek default or something.

With Ben Bernanke telling us he stands ready to act if bad things happen, it should make oil bulls feel pretty good at least for a little while. Ben helped restore a bit of confidence but still many markets are disjointed and people are questioning traditional market relationships. Is gold a safe harbor if we go into a deflationary tailspin or is it safe if things heat up in Saudi Arabia? Can you hide in oil as alternative? Or are bonds the only safe place to run to! The twist is working rate rise but will it put money back to work and make banks lend? The topsy turvy mood swings mean one thing! Get ready for some major moves!


You can catch Phil everyday on the Fox Business Network. You can also contact Phil directly at pflynn@pfgbest.com

It’s Official, We Are In A Bear Market For the S&P 500

How much further do we have to go on the downside? That’s a legitimate question, however, with Bear markets they tend to persist longer and take more pain than most investors are willing to sit through.

As you know from watching our videos, we are projecting lower levels for the S&P 500, as well as the banks and financial institutions. Those moves on not over yet.

In today’s presentation, we will be talking about three markets that are in the news. This will be a regular feature and we will try to bring you information that is timely, informative and educational. We will be talking about stocks, the Forex markets, and the futures markets.

The downward trend in the crude oil market continues with crude oil hitting a low today just below $75 a barrel. Our Trade Triangle technology has been all over this market and is presently short from $96.04 a barrel.

The beauty of following our Trade Triangle technology is that it’s totally non biased and it follows what the markets are doing, instead of what politicians, the news, or pundits are saying about a particular market. Intermediate and Long term traders should continue to be short the crude oil market.

November crude oil closed down $2.19 a barrel at $75.42 today. Prices closed nearer the session low today and hit a fresh 16 month low. A lower U.S. stock market and firmer U.S. dollar index pressured crude oil again today. The crude oil bears are in firm near term technical control.


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J.W. Jones: Is The S&P 500 on the Verge of a Big Rally

Only 5 short months ago the S&P 500 was trading at the 2011 highs around the 1,370 price level on the S&P 500 Index. Since then, the price action has devastated investors and traders alike. As of the close on Monday, the S&P 500 had worked over 270 handles lower in 5 months. The price action since September 27^th has been a bloodbath.

It is true that the S&P 500 could be carving out a double bottom on the daily chart, but I am of the opinion that there may be more work to do to the downside. We are oversold on the daily and weekly price charts, but I have yet to see the kind of panic level selling that typically precedes a price reversal. The chart below illustrates the number of stocks that are currently trading above the key 50 period moving average:



While most market participants are concerned about a trap door that causes prices to cascade lower, I am concerned that at some point news will come out that could rip the bears’ faces off. The majority of retail investors are running for cover. The sentiment levels are decidedly bearish and the last thing most traders are looking for is a rally. The contrarian trader in me cannot deny that a rally would do a lot of damage in the near future, but Mr. Market needs to suck in a few more bears in order to do the most harm.

One sound bite out of Europe could alter the price action almost instantly in favor of the bulls. The ECB could suddenly cut interest rates or announce that Eurobonds are going to be made available. Either two headlines or a combination of both headlines would most likely drive prices significantly higher.

After the nasty downside probe today, there are layers of buy stops above current price levels. If price worked high enough, the stops would be triggered and an all out rally could play out. Anything coming out of the Eurozone that appears to be either stimulative or that appears to push an ultimatum out on the time spectrum will be viewed as positive.

Often news and price action play out together at key support/resistance levels and it would make sense that some form of announcement will be made when the S&P 500 price is sitting right at a long term support level. As can be seen from the weekly chart of the S&P 500 Index ($SPX) below, the 1,008 – 1,050 price level is of critical importance.



The primary support levels I am watching on the S&P 500 if it continues lower are the 1,080 price level which should act as short term support. If that level breaks the 1,050 area will become a major support level that bulls will likely defend fervently. Additional long term support will come in around 1,008. I would be shocked to see the S&P 500 push through both the 1,050 and the 1,008 price level on the first attempt, but stranger things have happened.

If price works down to the 1,008 – 1,050 support zone it would not be shocking to see a strong reversal higher. With the recent carnage we have seen in the S&P 500, I find it hard to believe that we could see another 10 – 15% more downside before a reversal plays out. The 1,008 – 1,050 price zone seems ripe for a test, but one other scenario would be a test of the 1,080 support zone that fails intraday and by the close is regained. The chart below illustrates the two most probable scenarios:



Financial markets do not offer a sure thing, however it is without question that bulls will aggressively defend the 1,008 – 1,050 price level on the S&P 500. If that level fails, the price action is going to get far worse and an all out crash could be underway. For now, I am of the opinion we are within 7% – 8% of an intermediate term bottom which could produce a strong multi month rally into the holiday season.

As always anything could happen, but traders need to keep their eye on both sides of the price action. A rally would do a lot of damage to the bears as well as the under invested retail traders and investors. Ultimately the price action is in the hands of Mr. Market, but it is a well known fact that Mr. Market likes to trap traders and inflict pain on as many market participants as possible. A forthcoming rally  would offer yet another opportunity for a lot of traders to eat another slice of humble pie.

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Crude Oil, Natural Gas and Gold Market Commentary For Tuesday Morning October 4th

Crude oil was lower overnight and trading below key support marked by August's low crossing at 76.61. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If November extends last week's decline, the 75% retracement level of the 2009-2011 rally crossing at 72.20 is the next downside target. Closes above the 20 day moving average crossing at 84.56 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 80.70. Second resistance is the 20 day moving average crossing at 84.56. First support is the overnight low crossing at 75.84. Second support is the 75% retracement level of the 2009-2011 rally crossing at 72.20. Crude oil pivot point for Tuesdays trading is 77.83.

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November Henry natural gas was slightly lower overnight as it extends the decline off June's high. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term. If November extends the aforementioned decline, monthly support crossing at 3.225 is the next downside target. Closes above the 20 day moving average crossing at 3.874 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 3.752. Second resistance is the 20 day moving average crossing at 3.874. First support is Monday's low crossing at 3.591. Second support is monthly support crossing at 3.225. Natural gas pivot point for Tuesdays trading is 3.636.

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December gold was higher in overnight trading as it rebounds off last week's low. Stochastics and the RSI have turning bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 1740.20 are needed to confirm that a short term low has been posted. If December renews this month's decline, the 38% retracement level of the 2008-2011 rally crossing at 1476.20 is the next downside target.

First resistance is the 10 day moving average crossing at 1661.50. Second resistance is the 20 day moving average crossing at 1740.10. First support is last Monday's low crossing at 1535.00. Second support is the 38% retracement level of the 2008-2011 rally crossing at 1476.20. Gold pivot point for Tuesday morning is 1648.20.

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CME Raises Margins on Copper and Platinum.....Should You Be Holding Some Platinum

Dominic Schnider, Head Commodity Research at UBS Wealth Management comments on the latest moves in the commodities space and talks about investment strategy for the short term.




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Crude Oil at the Mercy of Weak Equities and Strong U.S. Dollar

Crude oil started off the day under a great deal of pressure trading below the 77 level before rallying. This market continues to be wrapped around the equity markets in such a way as to reflect their swings both up and down. So of course falling equities and a stronger U.S. dollar index today did pressure crude oil today.

This keeps crude oil bears in near term technical control and intermediate and long term traders should continue to be short the crude oil market. Crude oil finished Mondays regular session closed down $1.80 a barrel at $77.42 today. Prices closed nearer the session low of the day and hit a fresh seven week low.

Crude Oil Trade Triangles......

Monthly long term trends = Negative
Weekly for intermediate term trends = Negative
Daily for short term trends = Positive
Combined Strength of Trend Score = – 90


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Phil Flynn: Default Fears Flop

The weekend just seems longer when you have a long position. Oil traders just couldn't face the weekend as fears about the European banking system caused a late day Friday sell off. Oil Prices dropped a whopping 3.6% as fears that banks will quit lending to each other because of their exposure to European debt rocked traders.

Oil prices almost took out the low tick for the year and despite closing at the lowest level for the year, the price is still holding for now with traders wondering whether Europe has the will and the guts to do what is necessary to save the European bank.

The US is very worried about our banks exposure to the situation and we're asking for more up to date information of the European bank balance sheets. The UK treasury is now saying with fear that there are risks to Britain are they very, very great. And those fears that are spreading hit the commodities like a brick wall.

The market was already wobbly on fears of Chinese slowing after China's PMI fell for the third month in a row which was the first time that has happened since 2009. Weak data out of Germany added to those fears. Now it is up to European leaders to try to restore confidence as they meet this week to discuss a permanent European rescue fund. It will have to be something big and spectacular if they are going to get this market to start believing that Europe can get a handle on this crisis.

In the mean time the market is already seeing the impact of Libyan oil. Not only has the Brent WTI spread come in, but we are seeing the added benefit of OPEC oil output hitting the highest level since November, 2008 and they are now producing an astounding 30.055 million barrels per day.


Keep up with Phil by tuning into the Fox Business Network. You can contact Phil directly at pflynn@pfgbest.com!


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