Phil Flynn: To Embargo or not to Embargo, That is Indeed the Question

While the market got a boost on reports that European refiners were meeting with Saudi Arabia and other oil producers and securing an alternative to Iranian oil supply, apparently some in the EU did not like the answers that they heard. An overbought oil market seemingly got a reason to sell-off on a Bloomberg report that the European Union embargo on imports of Iranian oil will likely be delayed for six months to allow countries such as Greece, Italy and Spain to find alternative supply, quoting an EU official with knowledge of the talks and it hit the market at just the right time.

The truth is, as I have said before, the EU would like to put off an embargo until after winter and Italy still wants some of the money that the Iranians owe them. Still do not think that Iran will be able to sell their oil very easily. The bottom line is that all Iranian oil will be sold, but it will be sold at a discount. Is it any wonder that Iran is rattling that saber to keep prices high. They are hopping if they can keep prices artificially high they won't miss the loss of revenue! Which means it will be a saber rattling kind of weekend! With a three day holiday in the US, being short over the weekend might be a dangerous propostion.
Yet Bloomberg News is reporting that.....Read the entire article.

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ONG: Sharp Move Dominates Oil Market, Bears Take the Momentum

Sharp moves dominated yesterday's session, where oil rallied to acquire our targeted area near 103.00 before reversing sharply again to breach the bearish technical pattern shown on image in addition to 100.10 support. Currently, price is testing the breached level again which turns into resistance after testing the main pivotal support at 98.50, but in general, trading remain within the same ranging stance. Today we may see another downside attempt as important technical levels were breached yesterday. The trading range for the day is expected among the major support at 96.00 and the major resistance at 102.00. The short term trend is to the downside with steady daily closing below 105.00, targeting 65.00. Daily Pivot Points     Normal Range     Last Bar Commodity Chart S3 S2 S1 PP R1 R2 R3 H L C Crude Oil 92.93 95.71 97.41 100.19 101.89 104.67 106.37 102.98 98.50 99.10 Natural Gas 2.540 2.602 2.649 2.711 2.758 2.820 2.867 2.772 2.663 2.697 Heating Oil 2.9200 2.9798 3.0169 3.0767 3.1138 3.1736 3.2107 3.1364 3.0395 3.0541 Gasoline RBOB 2.5845 2.6512 2.6912 2.7579 2.7979 2.8646 2.9046 2.8245 2.7178 2.7313 Gold 1616.1 1628.5 1638.1 1650.5 1660.1 1672.5 1682.1 1662.9 1640.9 1647.7 Silver 28.966 29.418 29.771 30.223 30.576 31.028 31.381 30.675 29.870 30.124 Copper 3.4080 3.4650 3.5570 3.6140 3.7060 3.7630 3.8550 3.6710 3.5220 3.6490 Platinum 1468.7 1480.0 1490.0 1501.3 1511.3 1522.6 1532.6 1512.5 1491.2 1500.1       Extreme Range         Posted courtesy of Oil N' Gold

Could Crude Oil Prices Intensify a Pending SP 500 Sell Off?

Crude Oil Bulls Lose Momentum on Sharp Drop

Crude oil closed sharply lower on Thursday and below the 20 day moving average crossing at 99.21 confirming that a short term top has been posted. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term. If February extends today's decline, the reaction low crossing at 98.30 is the next downside target.

If February renews the rally off December's low, the 75% retracement level of the 2011 decline crossing at 104.84 is the next upside target. First resistance is last Wednesday's high crossing at 103.74. Second resistance is the 75% retracement level of the 2011 decline crossing at 104.84. First support is the reaction low crossing at 98.30. Second support is December's low crossing at 92.70.

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Crude Oil Moves into Positive Territory on all Trade Triangles

The crude oil market continues to consolidate over the $100 level. With all of our Trade Triangles in a positive mode we are looking for this market to move higher. A solid close over the $104 is needed to drive this market to the $120 level. External world events can trigger moves in this commodity. With a Chart Analysis Score of +90 this market remains in a strong trend to the upside. The crude oil market has resistance starting at $104. Long and intermediate term traders should be long this market with appropriate money management stops.

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EIA: Brent Crude Oil Averages Over $100 Per Barrel in 2011

Source: U.S. Energy Information Administration, based on Thomson Reuters.
Note: Brent is the underlying crude oil for the light sweet crude oil futures contracts on the Intercontinental Exchange (ICE). West Texas Intermediate (WTI) represents the spot price for crude oil at Cushing, Oklahoma, the physical delivery hub for NYMEX light sweet crude oil futures contracts.

The crude oil markets sustained high price levels in 2011, as the spot price of Brent averaged $111.26 per barrel, marking the first time the global benchmark averaged more than $100 per barrel for a year (see chart above). The West Texas Intermediate (WTI) crude oil price averaged $94.87 per barrel, up $15 per barrel from 2010, reflecting a discount to the Brent crude oil price due to transportation bottlenecks near Cushing, Oklahoma, the physical delivery hub for NYMEX light sweet crude oil futures contracts.

The price increases in 2011 reflected tightness in the global crude oil market that began in 2010 and marked the highest crude oil prices since 2008. Key factors affecting crude prices in 2011 included:

• Arab Spring. The Arab Spring and the civil war in Libya roiled oil markets during the first half of the year. Prices quickly escalated when protests in Libya intensified in late February. The spot price of Brent increased $15 per barrel from February 18 to March 2 as the market coped with the loss of 1.5 million barrels per day (bbl/d) of exports from Libya. With low spare production capacity, this sudden supply loss challenged the ability of the Organization of the Petroleum Exporting Countries (OPEC) producers to provide incremental supplies to an already tight market.
• Demand. Demand growth in emerging markets, notably China and the Middle East, drove crude oil prices higher in 2011 as well. During the first six months of 2011, the demand for petroleum products in countries not part of the Organization for Economic Cooperation and Development (non-OECD) grew by almost 4%, just as the market was coping with the loss of Libyan exports. Even with declining OECD country demand in 2011, overall global demand rose by 1.2% (1.1 million bbl/d).
• Transportation Bottlenecks. Brent's price strength in the first half of 2011 was not matched by WTI, which became dislocated from the global crude oil market due to transportation bottleneck issues in the U.S. Midwest (see chart below). Amid fast-rising crude oil production from the Bakken Shale formation and Canadian oil sands, prices for U.S. inland crude benchmark WTI weakened relative to those of broadly traded coastal or imported crude oil grades, such as Brent or Louisiana Light Sweet (LLS). Brent's premium to WTI reached a record level of almost $30 per barrel in September 2011. Between October and November the premium fell almost $20 per barrel, most likely as a result of signs that transportation constraints out of the U.S. Midwest, the main market for WTI, were easing. However, the spread ended the year close to $10 per barrel, still wide by historical standards.

Source: U.S. Energy Information Administration, based on Thomson Reuters.

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While WTI experienced a wide trading range in 2011, as its isolated market depressed the crude's value, Brent and other waterborne crudes maintained a fairly stable trading range anchored around $110 per barrel from May through the end of the year. Factors mitigating upward crude oil price pressure in 2011 included:

• Debt Crisis. The European debt crisis loomed large over the global economy, and expectations for economic growth globally, especially in the OECD economies, were not realized over the course of the year, resulting in lower-than-expected growth in demand for petroleum products.
• Strategic Petroleum Release. In response to the loss of Libyan supplies, the International Energy Agency's member countries collectively released stocks from their strategic petroleum reserves during the summer months.
• Supply Gains. Output increases from Saudi Arabia (OPEC's largest producer) and the return of Libyan oil production helped dampen price increases during the second half of the year.

Could Crude Oil Prices Intensify a Pending SP 500 Sell Off?

Crude Oil Settles Lower after US Oil Data

Crude oil futures prices settled 1.3% lower Wednesday, hit by a steep fall drop in U.S. oil demand and a sharp rise in fuel stockpiles. Prices ended at the lowest level so far in 2012, but were supported above $100 a barrel by growing concerns about the reliability of near term crude oil supply from Iran and Nigeria.

A Nigerian union leader said Wednesday that workers at oil platforms are on "red alert" and ready to shut down facilities in a growing national strike that erupted in response to soaring fuel costs after the government abruptly halted a $7 billion fuel subsidies program. Nigeria pumped 2.2 million barrels a day in December, according to U.S. estimates, and supplied 9% of U.S. crude oil imports in the first 10 months of 2011.

Meantime, U.S. Treasury Secretary Timothy Geithner on Wednesday urged top Chinese officials to significantly reduce imports of Iranian crude, after a new U.S. sanctions policy focused on nations that continue trading with Iran. Countries can avoid those sanctions by showing a significant reduction in Iranian oil imports.....Read the entire Rigzone article.


Could Crude Oil Prices Intensify a Pending SP 500 Sell Off?

ONG: Crude Oil Daily Technical Outlook For Wednesday January 11th

Crude oil continues to be bounded in sideway trading from 103.74 and intraday bias remains neutral for the moment. After all, near term outlook will remain bullish as long as 98.30 minor support holds. We'd expect rise form 74.95 to resume sooner or later. Above 103.74 will target 114.83 key resistance next. Though, break of 98.30 will dampen this bullish view and turn bias back to the downside for 92.52 support instead.

In the bigger picture, recent development indicates that pull back from 114.83 was completed at 74.95 already and medium term rally from 33.2 is not finished yet. We'd tentatively treat rise from 74.95 as resuming of such rally. Sustained break of 114.83 will target 61.8% projection of 33.2 to 114.83 from 74.95 at 125.40. On the downside, though, break of 92.52 support will indicate that correction pattern from 114.83 is going to extend further with another falling leg to 74.95 and below before completion.

Nymex Crude Oil Continuous Contract 4 Hour, Daily, weekly and Monthly Charts

Could Crude Oil Prices Intensify a Pending SP 500 Sell Off?

Crude Oil Closed Higher on Tuesday Ending a Three Day Correction

Crude oil closed higher on Tuesday ending a three day correction off last week's high. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are overbought but are turning neutral to bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 99.13 would signal that a short term top has been posted. If February extends the rally off December's low, the 75% retracement level of the 2011 decline crossing at 104.84 is the next upside target.

First resistance is last Wednesday's high crossing at 103.74. Second resistance is the 75% retracement level of the 2011 decline crossing at 104.84. First support is the 10 day moving average crossing at 100.23. Second support is the 20 day moving average crossing at 99.17.


Could Crude Oil Prices Intensify a Pending SP 500 Sell Off?

ONG: Crude Oil Prices Lifted by Iranian Tensions Again

Oil prices soared in European session amid news the US is prepared to force to stop Iran's nuclear development. Concerns over oil supply were exacerbated as Venezuela indicated that the OPEC should do nothing to offset the loss, if any, of oil output from the cartel member. China released its preliminary trade data for December. On the whole, import growth missed expectations as driven by earlier Chinese New year, slowdown in external demand which affected processing import growth and the sharp decline in commodity prices.

Tensions over Iran escalated as a former advisor of Obama's National Security Council Dennis Ross said that the US President would not reluctant to use force to stop the nuclear-armed Iran from continuing development nuclear weapons. The comments followed US Defense Secretary Leon Panetta's warning that the US 'will not tolerate the blocking of the Straits of Hormuz...That's another red line for us and that we will respond to them'. 

As we mentioned in previous articles, suspension of Iranian output or the block of the Strait of Hormuz would result in oil supply shortage in the near- to medium-term. While it's expected that Saudi Arabia would increase production to replace any loss of Iranian oil, Venezuela does not seem to agree with that with oil minister Rafael Ramirez stating that 'any Iranian action in defense of their sovereignty is Iran's issue' and 'OPEC can't get involved in this issue'.

China's trade surplus widened to US$ 16.5B in December from US$ 14.5B a month ago. Exports grew +13.4% y/y, easing modestly from +13.8% in the prior month. Import growth fell to +11.8% in December from +22.1% in November. It also missed consensus of +18.0%. For 2011 as a whole, exports and imports expanded +20.3% and +24.9% respectively, down from +31.3% and +38.9% in 2010. Trade surplus narrowed to US$ 155.1B from US$ 184.5B in 2010.

As the second largest oil consumer, China's net imports of crude oil fell to 5.1M bpd in December, down slightly from 5.51M bpd in November. From a year ago, net imports climbed +4.70%, easing greatly from 11.0% and +28.3% in November and October respectively. Net imports of oil products, including gasoline and diesel, soared to the highest level in 2011, however. Although investors may trade the weaker-than-expected import growth number as a negative sign of China's economic growth, it may be driven by seasonal factor (Chinese New Year). Robust export growth should indicate to investors that demands from countries such as the Eurozone, the US and Japan were not as dismal as anticipated.

Posted courtesy of Oil N' Gold.Com

Crude Oil, Gold and Natural Gas Market Commentary For Monday Jan. 9th

Crude oil closed lower due to profit taking on Monday as it consolidates some of the rally off December's low. The mid range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If February extends the rally off December's low, the 75% retracement level of the 2011 decline crossing at 104.84 is the next upside target. Closes below the 20 day moving average crossing at 99.00 would signal that a short term top has been posted. First resistance is last Wednesday's high crossing at 103.74. Second resistance is the 75% retracement level of the 2011 decline crossing at 104.84. First support is the 10 day moving average crossing at 100.96. Second support is the 20 day moving average crossing at 99.00.

Natural gas closed lower on Monday as it consolidates below the 10 day moving average crossing at 3.058. Stochastics and the RSI are turning bullish hinting that a low might be in or is near. Closes above the 20 day moving average crossing at 3.140 are needed to confirm that a short term low has been posted. If February renews last year's decline, monthly support crossing at 2.409 is the next downside target. First resistance is the 10 day moving average crossing at 3.058. Second resistance is the 20 day moving average crossing at 3.140. First support is last Tuesday's low crossing at 2.936. Second support is monthly support crossing at 2.409.

February gold closed lower due to profit taking on Monday as it consolidated some of the rally off December's low. The low range close sets the stage for a steady to lower opening on Tuesday. 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 1643.70 are needed to confirm that a low has been posted. If February renews the decline off November's high, July's low crossing at 1482.60 is the next downside target. First resistance is last Friday's high crossing at 1632.30. Second resistance is the reaction high crossing at 1643.70. First support is December's low crossing at 1523.90. Second support is July's low crossing at 1482.60.

Could Crude Oil Prices Intensify a Pending SP 500 Sell Off?