Exxon May Soar On New Potential In Mexico

Things have been looking great for Exxon Mobil (XOM) lately. Anadarko Petroleum (APC) recently indicated that Exxon may become a partner in Anadarko's Gulf of Mexico operations. Anadarko is already partnered with Plains Exploration & Production Company (PXP) on its deepwater Phobos project in the Gulf, and according to Anadarko Vice President of Investor Relations and Communications, John Colglazier, Exxon may enter the project with up to a 20% working interest, which would reduce Anadarko's interest from 50 to 30%.

In exchange, Anadarko could receive cash and a drilling carry, which would potentially cover the cost of the project's first exploration well. This would be beneficial for Exxon Mobil, and represents just one of the recent successes the company has seen lately. Below, I will show how Exxon's current position within the energy sector makes it a strong investment now.....Looking Deep for Gains

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Iran Drafts Bill to Block Strait of Hormuz

Iran's National Security and Foreign Policy Committee has drafted a bill calling for Iran to try to stop oil tankers from shipping crude through the Strait of Hormuz to countries that support sanctions against it, a committee member said on Monday.


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Looks like we are in good company SDRL

Looks like we are in good company. Most of you know we SeaDrill, ticker SDRL, is one of our COT fund favorites.....

Vanguard Windsor II fund manager Jim Barrow is "nervous" about oil and energy stocks, but is bullish on Seadrill as "the dominant factor" in high tech drill ships. SDRL has the world's newest fleet, Barrow exults: "Their boats rent for more than other people’s do. It is a great company run by Norwegians who know exactly what they are doing."

Adams video update "As we start Q3 is a global slowdown in the cards"

A surprise announcement out of the European summit pushed the market higher on Friday. It was also the end of the week, the end of the month, and the end of the quarter. For Q2 most of the markets were down, including the equity markets. We think that’s an important element to look at. We still believe the trend is down and intact and that Friday was more of a short covering rally.

Now, let’s analyze the major markets and stocks on the move using MarketClub’s Trade Triangle Technology.....Click Here to view today’s video

CME: Natural Gas Prices Holding at Upper End of Trading Range

Natural Gas prices are continuing to trade around the upper end of the trading range on lighter than normal volume (likely related to the holiday this week in the US) as the very hot weather across major portions of the US results in a larger than normal call on Nat Gas for power related cooling demand versus the possible loss of Nat Gas demand as the economics of coal to gas switching continues to fade at current price levels. The economics of coal to gas switching are hovering around the unchanged level between coal and Nat Gas and at a level where utilities could begin to move back to coal in light of the overstocked coal inventory situation at many utility facilities.....Read the entire article.

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CME: Crude Oil Prices Remain Firm

Crude oil and most risk asset markets drifted a tad lower after last Friday's meteoritic short covering rally on the back of the EU Ministers deal. The deal details are still not available and there are some indications from Finland (according to a report in Reuters) that the deal could be fraying. I am not sure that will be the case so early after the deal had been put together but these kind of rumors and comments are likely to emerge over the next several weeks as the technocrats begin the process of working out the details of the deal. As such the markets will be reacting accordingly to any indications that the deal is changing especially after the large rally on Friday.....Read the entire article.

Dennis Gartman: Sell into Strength, Crude Oil Rally Won’t Last

Energy bulls prepare for disappointment. Commodities pro Dennis Gartman doesn’t think any rally in oil will be sustainable.

“I don’t see how an advance can be sustainable,” says Gartman. “The amount of oil [CLCV1  84.46  0.71  (+0.85%)] coming onto the market - is overwhelming.”

First and foremost Gartman believes Saudi Arabia intends to keep the world well supplied because they want to keep prices low and squeeze Iran, which is more susceptible to lower oil. (Saudi Arabia and Iran are longtime rivals with Tehran openly challenging the legitimacy of the royal House of Saud.)

LIGHT CRUDE AUG2 (CLCV1) 84.46     0.71  (+0.85%%) New York Mercantile Exchange

But that's not the only negative catalyst for oil.

In addition, Gartman believes the market will be well supplied due to discoveries made right here in the US such as the massive discovery in North Dakota’s Bakken Shale.

And Gartman thinks the abundance of nat gas in the US is negative for oil because trucking companies have a strong incentive to convert their fleet to alternative energy.

All told, “I can see the rally in oil lasting another $2-$3 dollars but any bounce should be sold,” he says. “At the end of the day, I’d be a seller."

Investor Dennis Gartman tells "Fast Money" which way he thinks crude oil will be going in the second half of this year.

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Crude Oil Bulls Struggle to Hold 20 Day Moving Average

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Crude oil fell on Monday as the Institute for Supply Management’s U.S. factory index dropped 1.4 percent and collective Euro unemployment hit historic highs never seen in history.

Crude oil posted an inside day with a lower close on Monday as it consolidated some of last Friday's rally but remains above the 20 day moving average crossing at 82.49. The mid range close sets the stage for a steady opening when Tuesday's night session begins. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. If August extends last Friday's rally, the 38% retracement level of this year's decline crossing at 90.43 is the next upside target. If August renews this year's decline, the 75% retracement level of the 2011-2012 rally crossing at 73.28 is the next downside target. First resistance is the reaction high crossing at 87.32. Second resistance is the 38% retracement level of this year's decline crossing at 90.43. First support is last Thursday's low crossing at 77.28. Second support is the 75% retracement level of the 2011-2012 rally crossing at 73.28.

John Kilduff, trader with Again Capital, said a weak jobs report this Friday could spur additional selling. But he doesn't see much chance of oil slipping into the $60s, as some had been discussing prior to Friday. "It's only a draft," said Tony Rosado, an oil options analyst and broker at GA Global Markets. But if Iran takes more concrete action in the strait, an important waterway for oil, "then I think people will have to take it more seriously," Mr. Rosado added.

Natural gas closed higher on Monday and is poised to extend the rally off June's low. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI have turned bearish hinting that a short term top might be in or is near. Multiple closes below the 20 day moving average crossing at 2.564 are needed to confirm that a short term top
has been posted. If July extends the rally off June's low, February's high crossing at 3.137 is the next upside target. First resistance is last Wednesday's high crossing at 2.975. Second resistance is February's high crossing at 3.137. First support is the 10 day moving average crossing at 2.714. Second support is the 20 day moving average crossing at 2.564.

Gold posted an inside day with a lower close on Monday. The high range close sets the stage for a steady to higher opening when Tuesday's night session begins trading. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. Multiple closes above the 20 day moving average crossing at 1600.10 are needed to temper the bearish outlook. If August renews the decline off June's high, May's low crossing at 1529.30 is the next downside target. First resistance is the 20 day moving average crossing at 1600.10. Second resistance is reaction high crossing at 1642.40. First support is the reaction low crossing at 1556.40. Second support is May's low crossing at 1529.30.

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Oil Traders Keeping an Eye on Iran

Are you ready for this weeks move?

CNBC's Sharon Epperson on oil price action in the day ahead, with an outlook on EU sanctions against Iran and tomorrow's meeting with Western countries about its nuclear program.



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Obviously, the Crude Oil Markets Overreacted Last Week

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CME: August crude oil prices traded lower during the overnight and early morning hours, as they corrected Friday's more than 9.0% gain. Some traders suggested that sluggish China and European manufacturing data served to tamp down global oil demand prospects and pressured crude oil prices lower. Meanwhile, there were a couple of positives in the crude oil market that might have limited early morning losses, including a European embargo on Iranian oil that went into effect over the weekend and the ongoing oil workers strike in Norway. The Commitments of Traders Futures and Options report as of June 26th showed non-commercial traders were net long 178,866 contracts, a decrease of 13,193. Non-commercial and nonreportable traders combined held a net long position of 192,382 contracts, for a decrease of 5,729 in their net long position.

COT: August crude oil was lower overnight as it consolidated some of last Friday's rally but remains above the 20 day moving average crossing at 82.49. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. If August extends the rally off June's low, the reaction high crossing at 87.32 is the next upside target. If August renews this year's decline, the 75% retracement level of the 2009-2011 rally crossing at 73.28 is the next downside target. First resistance is the reaction high crossing at 87.32. Second resistance is the reaction high crossing at 92.52. First support is last Thursday's low crossing at 77.28. Second support is the 75% retracement level of the 2009-2011 rally crossing at 73.28.

“The economic data doesn’t seem to suggest oil demand is going to be very explosive, and the demand expectation is softening,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “The market realized that maybe people overreacted last week and we are pulling back to a more normal area.”

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