EIA: United States Energy Imports Decline While Energy Exports Increase

In 2011, the United States consumed more than 97 quadrillion Btu (quads) of energy, despite only producing about 78 quads. The difference, about 18 quads, reflects the balance of imports and exports of energy. Petroleum, which includes crude oil as well as petroleum products, accounted for a majority of both energy imports and exports.

The United States imported almost three times as much energy as it exported in 2011, a ratio that is much lower than the import peak in 2002, when energy imports were more than eight times energy exports. Imports have exceeded exports in every year since 1952.

Petroleum made up about 86% of energy imports in 2011. Canada supplied the largest share of these petroleum imports. The next biggest sources of U.S. petroleum imports in 2011 were Mexico, Saudi Arabia, Venezuela, and Nigeria, in that order. Overall, about 40% of U.S. petroleum imports came from countries in the Organization of the Petroleum Exporting Countries (OPEC), while 60% came from non OPEC countries such as Canada, Mexico, Russia, and Brazil. Most of these petroleum imports were crude oil as opposed to petroleum products.



Besides petroleum, most of the remaining energy imports were natural gas (12%). All other fuel sources, including coal, coal coke, biofuels, and electricity, combined to account for about 2% of energy imports in 2011.

Petroleum also made up the bulk (57%) of U.S. energy exports in 2011. However, less than 2% of that exported petroleum was crude oil. Most of it was products derived from crude oil: petroleum products, unfinished oils, pentanes plus, and gasoline blending components, as the United States has some of the world's most advanced oil refineries.

Other energy exports include coal and coal coke (27%), natural gas (15%) and a small amount of biofuels and electricity (about 1%).

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Getting Coal in Your Stocking May Be Exactly What You Want

Looks like the guys at The Gold & Oil Guy.com are working through the weekend as staffer Chris Vermeulen is bringing us yet another great trade to get Mondays trading off to a good start.....

We all want new and exciting electronic gizmos and gadgets for the holiday season. Unfortunately they have the tendency to lose almost all their value within weeks because of newer versions etc… but what if you just got a lump of dirty old coal in your stocking, how would you feel?

The only individuals who would appreciate a dirty gift like that would be those forward looking investors who see major opportunities before they become the next big movers and headline news.

Knowing how to spot Stage 1 patterns is one of the most important bits of information you need to know as an investor. This one pattern is how I found RIMM which now up 100% in the past 30 days, ANR up 30% in two weeks, FSLR up 20% in 20 days and the list goes on. My main focus is on ETFs because of lower risk they provide but very powerful when applied to individual stocks.

Coal and coal stocks have been out of favor for almost two years now. But these unwanted and hated shares may soon be owned by the masses, or at least by traders and investors. A few weeks ago to I talked about the four stages all investments go through and which patters you must be able to spot in order to make huge money investing while having very limited downside risk.

In summary, Trade with the BIG BOARD and only focusing on buying stocks, ETFs etc… as they are coming out of a Stage 1 Accumulation Basing Pattern. This puts the odds greatly in your favor for not only winning the majority of your trades but to generate above average returns.

The BIG BOARD – NYSE – Weekly Major Stock Market Trend

The New York Stock Exchange is the big board. This chart formed a reversal candle last week which points to lower prices. Its likely we see a 1-2 week dip before buyers step back in. Until then individual stocks should pause or form mini bull flags until the sellers are finished and buyers step back into risk on assets (equities).

Coal Sector ETF Showing Stage 1 Basing Pattern

Coal stocks have been bouncing bottom for some time and if you did not review the Stages Report using the link above then do so now so you know what to expect in detail.

KOL coal exchange traded fund is a basket of coal companies and is starting to show signs of a new bull market. A breakout and close above $26.00 should trigger strong buying with the potential of a 21% gain before it hits my first price target. This could go way past that but one target at a time folks.

Naturally I would like to see a bull flag or pause in KOL over the next couple weeks, then look to get long using the pivot low of that pause/bull flag as my protective stop. I’m not jumping in here as the broad market looks ready to correct and ¾ stocks follow the big board which will pull KOL down.

 

ANR – My Top Coal Stock Pick

I pointed out ANR at $7.50 at the beginning of December to followers as it was the best looking coal stock I could find. The two key indicators “Price” and “Volume” were clearly pointing to higher prices and the potential gain even if it was just played up to the Stage 1 Resistance Level still netted a 30% move. Crazy part is that there is the potential for a 100% rally to my first price target.

You want Gizmos or Coal in You’re Stocking???

In short, I really like the coal sector for the first quarter of 2013. I’m not too worried about the fiscal cliff as it’s not the end of the world and the US along with most other countries are all bankrupt together in my opinion. New rules and ideas will be implemented and life and business will continue… I am not to worried.

I am expecting stocks to continue sideways or higher into May at which time a serious correction could take place. But not to worry as we take things one week at time and will be adjusting my outlook accordingly.

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Chris Vermeulen

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Schlumberger Issues Disappointing Fourth Quarter Update

Schlumberger Limited (NYSE:SLB) provided the following fourth quarter operational update on Friday.


• The Europe/CIS/Africa Area is experiencing continued contractual delays combined with higher than usual seasonal slowdowns in activity

• North America activity is weaker than anticipated on land in the US and Western Canada.

The combined earnings per share impact of the above is estimated to be in the range of $0.05 to $0.07 per share.

Schlumberger will discuss final results of the fourth quarter in detail during its previously announced fourth quarter earnings conference call on January 18, 2013, beginning at 9:00 am (US Eastern Time), 3:00 pm (Paris time).

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Mid week trades to focus on .... SPX, U.S. Dollar and Natural Gas

Yesterday’s price action was very bearish yet again and we are patiently waiting for a counter trend pullback to happen. While three are some good looking plays out there I really do not want to get long until the market clears the air with a bout or three of strong selling. Remember 3:4 stocks follow the market and the odds of picking a commodity or ETF that bucks the trend is unlikely.

SP500 / Broad Stock Market

We have seen a bug run up in stocks this month and things are looking a little long in the teeth. A large number of stocks are trading above their upper Bollinger band and the broad market is testing that key resistance level also. Typically when a Bollinger band is reached we see price reverse for a couple days at minimum.

While the equities market is in a new uptrend as seen by the moving averages I pullback seems imminient. The last two days has formed reversal candles and are pointing to lower prices.



Dollar Index Hourly Chart

This chart shows a possible bottom forming in the dollar pointing to a 3-8 day pullback in stocks.



Gold Futures Hourly Chart



Natural Gas Hourly Chart



Morning Trading Conclusion

Looking at the charts on several different time frames, not all shown here, technical analysis shows a pullback in stocks is highly likely. This is what we are currently positioned for.

The US dollars downward momentum is slowing and if it can find a bid today it should trigger strong selling in both stocks and commodities. Gold and silver are down sharply along with miners.

We have been watching natural gas for a few months and know that it has been trading inverse to what stocks do. This bodes well for a bounce in natural gas if stocks start a sell off. That being said, natural gas is trading at a key tipping point that could spark a very fast and hard drop. This knife can fall at a speed that will take a slice out of your trading account if not traded and managed properly (tiny position and use of a stop). I actually like natural gas the more it moves down and could issue a buy alert on it today or this week. I would like to see volume decline at this level showing the momentum is slowing......

Chris Vermeulen

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Dominick Chirichella: Crude Oil Prices Lower on Profit Taking Selling

Some of the uncertainty that was looming over all of the markets this week is now in the background. The OPEC meeting ended with a rollover agreement (as I suggested) with the group kicking the can down the road for a year on the election of a new Secretary General. A view that the economy is starting to show signs of stabilization coupled with the main oil demand growth engine of the world... China now projected to show its oil demand growth growing at a faster pace than previously projected (latest IEA monthly report) was enough for OPEC to take a wait and see approach to production levels. This will be an issue that will most likely have to be dealt with sometime during the first half of the year especially if supply continues to outstrip demand.

Today in the EU another tranche of aid was approved for Greece while the EU Finance Ministers finally agreed to put the ECB in charge of all of the banks. Greece is now moving further into the background and will remain a secondary market driver for the next several months or until the next Greece crisis emerges. The agreement to put the ECB in charge of all of the banks will move the EU one step closer to financial integration. The agreement opens the door for the EU's financial firewall to now provide direct bailout to the banks under the direction of the ECB. As is always the case with the EU there are still many details that will have to be worked out prior to the start date of the new ECB authority on March 1, 2014. Overall pushing Greece into the background coupled with the new agreement by the EU Finance Ministers is a positive for the EU economy as well as the EU equity markets at least for the short term.

In the US at least one of the major uncertainties is out of the way... the outcome of the last US FOMC meeting of the year. As expected the Fed replaced Operation Twist with a new or additional round of quantitative easing... let's say QE3a or QE4 that will entail the buying of another $45 billion dollars of long term Treasury instruments. Thus starting in January the Fed will be printing about $85 billion dollars per month to provide liquidity to the long term bond markets...both mortgage and treasury instruments.....Read the entire article and see Dominicks charts.


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EIA: For most fuel sources, domestic production has been increasing

In 2011, the United States produced about 78 quadrillion Btu (quads) of energy, more than at any point in the nation's history. More than three-quarters of this energy production came from nonrenewable fossil fuels: coal, natural gas, crude oil, and natural gas plant liquids. Despite rising production, the United States was a net energy importer, consuming more than 97 quads of energy in 2011.

The 60.6 quads of domestic fossil fuel production set a record, exceeding the previous peak of 59.3 quads in 1998. Of those fuels, natural gas surpassed coal as the most produced fuel with 23.5 quads compared to coal's 22.2 quads. Production of crude oil, which experienced a long decline from 20.4 quads in 1970 to 10.5 quads in 2008, rose to almost 12 quads in 2011. Natural gas plant liquids (NGPL), which are distinct from 'dry' natural gas, rose to their highest level of 2.9 quads.



Other fuels also experienced record production levels in 2011. Biomass, which includes wood and wood-derived fuels, biomass waste, and biomass inputs to the production of ethanol and biodiesel, increased to 4.5 quads. Other nonhydroelectric renewable energy increased to 1.6 quads, mostly from wind (1.2 quads), with the balance from geothermal and solar photovoltaic.

The other fuel sources remained at their recent product levels: nuclear electric power contributed 8.3 quads, maintaining its position as the nation's largest nonfossil fuel energy source, and hydroelectric power contributed 3.2 quads.


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The One Crude Oil Chart Everybody Should See

When people read about a long term forecast of world oil supply, say, out to 2030, they often believe that the forecasters are merely incorporating our knowledge of existing fields and figuring out how much oil can be extracted from them over the forecast period.

Nothing could be further from the truth. Much of the forecast supply has not yet been discovered or has no demonstrated technology which can extract or produce it economically. In other words, such forecasts are merely guesses based on the slimmest of evidence.

Perhaps the best ever illustration of this comes from a 2009 presentation made by Glen Sweetnam, a U.S. Energy Information Administration (EIA) official. The EIA is the statistical arm of the U.S. Department of Energy.

The following chart from that presentation will upend any notion that we know exactly where all the oil we need to meet expected demand will come from.....Read the entire article "The One Crude Oil Chart Everybody Should See "


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Is this "an emerging low" in gold stocks?

Gold stocks have been in another recent downtrend, which makes sense during a “wave 2″ correction in GOLD.

If we review the GDX ETF for Gold Stocks we can see a possible triple bottom formation. This one though looks bullish for a reversal trade to the upside near term as GOLD forms a C wave bottom.

This triple bottom looks like a series of higher lows should the 43-44 GDX ranges hold near term. The MACD line is still trending down, but in very oversold territory as in the prior two lows that had massive rallies.

Ways to play a reversal for the aggressive stock investor is NUGT ETF, which is a 300% long leveraged ETF based loosely on the GDX ETF (1x).

The specific timing of entering NUGT is of course tricky and best saved for our ATP trading service. That said, assuming GOLD does bottom at 1681 or 1631 near term, the GOLD stocks tend to lead the metal higher.… so they will bottom BEFORE the metal.

Here is the GDX long term chart showing what looks like an emerging Tradeable low...




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What the VIX Term Structure is Saying About the Fiscal Cliff

The past few weeks have been full of a constant barrage of press conferences and public statements from the charlatans in Washington D.C. Politicians cannot pass up a chance to get in front of the cameras and the media has used the “fiscal cliff” as a mechanism to scare average Americans further about their future.

Interestingly enough, amid all of the nonsense that has been going on stocks have remained resilient. I think sometimes its important to just step back away from the media’s noise and just look at some price charts for more clarity. The S&P 500 Index has been trading in a relatively tight range now for over 6 trading sessions as shown here by the great staff at The Technical Traders.com......

Read "What the VIX Term Structure is Saying About the Fiscal Cliff"



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Energy Sector Storm Brewing – Oil & Gas Stocks

Todays article comes from our trading partner Chris Vermeulen of The Gold & Oil Guy.com and if you have been following him this fall you know Chris has been cranking out the great calls. Today appears to be no different.....

Oil and gas along with their equities have been under performing for the most part of 2012 and they are still under heavy selling pressure.

I watch the oil futures chart very closely for price and volume action. And the one thing that is clear for oil is that big sellers are still unloading copious amounts of contracts which is keeping the price from moving higher. Oil is trading in a very large range and is trending its way back down the lower reversal zone currently. Once price reverses back up and starts heading towards the $100 and $105 levels it will trigger strong buying across the entire energy sector.

Crude Oil, Energy & Utility Sector Chart – Weekly Time Frame

The chart below shows the light crude oil price along with the energy and utilities sectors. The patterns on the chart are clearly pointing to higher prices but the price of oil must shows signs of strength before that will happen. Once XLE & XLU prices break above their upper resistance levels (blue dotted line) they should takeoff and provide double digit returns.

Looking at the XLU utilities sector above I am sure you noticed the steady rise in the price the last couple of years. This was a result in the low interest rates in bond price and a shift from investors looking for higher yields for their money. Utility stocks carry below average risk in the world of equities and pay out a steady and healthy dividend year after year. So this is where long term investment capital has/is being parked for the time being.

Utility Stock Sector – Deeper Look – 2 Hour Candle Chart Time Frame

Last week I covered utility stocks in detail showing you the Stage 1 – Accumulation base which they had formed. The chart below shows the recent price action on the 2 hour candle chart and recent run up. You can learn more about how to take advantage of this sector here.





Oil and Gas Services – Daily Time Frame

This chart shows a very bullish picture for the services along with its relative strength to oil (USO) at the bottom. While the sector looks a little overbought here on the short term chart, overall it’s pointing to much higher prices.





Energy Sector Conclusion:

In short, crude oil looks to be trading in a VERY large range without any sign a breakout above or below its channel lines for several months at the minimum. But if the lower channel line is reached and oil starts to trend up then these energy related sector ETFs should post some very large gains and should not be ignored.

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Chris Vermeulen

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