Majors Drilling In Brazil Despite Low Prices, Barclays Calls For $71 Oil, Crude Oil Lower On Inventory Fears

"Crude Oil Falls On Speculation U.S. Supplies Climbed Last Week"
Crude oil fell from a five month high on speculation a government report will show that U.S. supplies climbed to the highest level in 18 years. An Energy Department report tomorrow will probably show that crude oil inventories increased 2.5 million barrels last week, according to a Bloomberg News survey. Prices surged yesterday as the Standard & Poor’s 500 Index erased its 2009 loss and pending sales of existing U.S. homes jumped. “The market keeps rising on a rather shaky foundation,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. "You are still sitting on a lot of inventory".....Complete Story

"Foreign Oil Majors Drilling in Brazil Despite Oil Prices"
Foreign oil companies continue prospecting for crude at Brazilian concessions, including the key BMS22 block in the Santos Basin, despite a steep decline in oil prices and daunting costs. A series of high profile oil discoveries in the past few years has made Brazil one of the world's most exciting oil frontiers. Last week, state run energy giant Petroleo Brasileiro SA (PBR), or Petrobras, pumped the first crude from a Santos Basin sub salt well at the Tupi field. BMS22 is part of a cluster of promising Santos Basin blocks that have yielded several oil discoveries, including the nearby BMS11 block's Tupi the Western Hemisphere's largest oil discovery in 30 years.....Complete Story

"Oil May Break Resistance, Rise to $71.55: Technical Analysis"
Crude oil may be headed for $71.55 a barrel after breaking through $56.10 a barrel, according to Barclays Capital. Should the June crude oil contract push through the high of $56.10 a barrel reached on March 26, futures may climb past the Jan. 6 intraday high of $59.66 to $62 a barrel, Barclays Capital analysts, led by Jordan Kotick, said in a May 4 report. Oil could jump to $71.55 a barrel as traders attempt to exit the large number of short positions, or bets that prices will fall, creating a so called short squeeze, the analysts said. This is equal to the upward moves oil has made from a so called.....Complete Story

Crude Oil Lower Overnight, Higher Prices Possible Near Term

June crude oil traded slightly lower overnight as it consolidated some of Monday's rally but move higher as we close in on regular trading hours. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

If June extends last week's rally, April's high crossing at 55.85 is the next upside target. Closes below the 10 day moving average crossing at 51.42 are needed to confirm that a short term low has been posted.

We will be watching the SP 500 and the U.S. dollar closely as we expect a pull back in the markets to take crude oil down with it. We still are only playing crude on the long side as this bull run is a train we won't get in front of until the SP trades in the 950 area.

Tuesday's pivot point is 53.90

First resistance is Monday's high crossing at 54.64.
Second resistance is the reaction high crossing at 54.81.

First support is the 20 day moving average crossing at 51.59.
Second support is the 10 day moving average crossing at 51.42.

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The June S&P 500 index was slightly higher overnight as it extends the rally off March's low. Stochastics and the RSI are diverging but are bullish signaling that sideways to higher prices are possible near term.

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target. Closes below the 20 day moving average crossing at 856.14 are needed to confirm that a short term top has been posted.

Tuesday's pivot point, our line in the sand is 895. Above 895 we are bullish and look to take profits near 1st resistance.

First resistance is the overnight high crossing at 913.25
Second resistance is January's high crossing at 924.75

First support is the 10 day moving average crossing at 884.50
Second support is the 20 day moving average crossing at 866

The June S&P 500 Index was up 0.40 points. at 903.20 as of 5:58 AM CST. Overnight action sets the stage for a steady to higher opening by the June S&P 500 index when the day session begins later this morning.

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The June Dollar was lower overnight as it extends last week's decline. Stochastics and the RSI are becoming oversold but remain bearish signaling that sideways to lower prices are possible near term.

If June extends the decline, March's low crossing at 83.14 is the next downside target. Closes above the 20 day moving average crossing at 85.44 would temper the near term bearish outlook in the market.

First resistance is the 10 day moving average crossing at 85.05.
Second resistance is the 10 day moving average crossing at 85.44.

First support is the overnight low crossing at 83.81.
Second support is March's low crossing at 83.14.


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Crude Oil Closes Higher, Bulls Have The Technical Advantage

June crude oil closed up $1.16 at $54.36 a barrel today. Prices closed near the session high today and hit a fresh three week high, amid a stronger U.S. stock market and a weaker U.S. dollar. Bulls are gaining fresh upside near term technical momentum.

The U.S. stock indexes closed solidly higher and closed at multi month highs today, amid some better U.S. housing starts data and ideas the U.S. economy has seen the worst. The bulls have gained fresh near term upside technical momentum. The fact that so many traders are looking for a downside correction soon is in fact a bullish technical clue.

The June U.S. dollar index closed down 76 points at 83.94 today. Prices closed near the session low and hit a fresh six week low. Bears are gaining downside near term technical momentum.


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Oil Hits Highest Prices In 5 Weeks, Alaska Projects Revving Up, Oil Execs On Energy Independence

"Oil Rises to Highest in 5 Weeks as Pending Home Sales Increase"
Crude oil rose to a five week high as the number of Americans signing contracts to buy previously owned homes jumped along with spending on U.S. construction projects, signaling energy demand may improve with the economy.

Oil climbed as much as 1.4 percent and the Standard & Poor’s 500 Index came within 1 percent of erasing its 2009 loss as the National Association of Realtors said the index of signed purchase agreements jumped 3.2 percent in March, compared with a 2 percent gain in February.....Complete Story

"Two New Projects Revving Up in Alaska's Oil Patch"
Oil prices are down and some oil-patch work is being throttled back, but North Slope producers are going full steam ahead on two large projects. Several hundred people have been put to work and the numbers will increase as the work continues, the companies involved say. One project underway is at Point Thomson, 60 miles east of Prudhoe Bay, where ExxonMobil Corp. is rigging up to begin drilling a large undeveloped gas and condensate field.

The company has completed the move of a large drill rig and other equipment to the site over 50 miles of ice road. Nabors Rig 19-E, one of the largest in Alaska, is now being reassembled. Plans are to start drilling in early May and continue operations through the summer.....Complete Story

"U.S. Energy Independence? Get Real, Oil Execs Say in Survey"
Most oil industry executives scoff at the idea that the U.S. can wean itself off foreign crude in the next couple of decades, a survey showed. Only 16 percent of oil and natural gas executives said that by 2030 the U.S. will be able to depend solely on its own energy supplies, according to a survey by KPMG LLP’s Global Energy Institute. A majority said it will be after 2015 before it’s “viable” to mass produce alternative energy.

“The executives’ perceptions of energy independence mirror their views on the viability of alternatives in the near term,” Bill Kimble, executive director of the institute, said in a statement. KPMG surveyed 382 U.S. financial executives in the oil and gas business last month.....Complete Story


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Crude Oil Appears To Be Consolidating Friday's Rally

Crude oil is trading lower as we close in on the regular trading session and was steady to slightly lower overnight as it consolidates some of last Friday's rally but remains above the 20 day moving average crossing at 51.46. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

If June extends last week's rally, the reaction high crossing at 54.81 is the next upside target. Closes below the 10 day moving average crossing at 50.69 are needed to confirm that a short term low has been posted.

Monday's pivot point for crude oil is 52.21

First resistance is last Friday's high crossing at 53.65.
Second resistance is the reaction high crossing at 54.81.

First support is the 20 day moving average crossing at 51.46.
Second support is the 10 day moving average crossing at 50.68.

Our weekly forecast is to buy the dips this week, selling into the 54.50 area as long as we continue trading this current range.

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The June S&P 500 index was higher overnight as it extends the rally off March's low. Stochastics and the RSI are diverging but are neutral to bullish signaling that sideways to higher prices are possible near term.

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target. Closes below the 20 day moving average crossing at 851.44 are needed to confirm that a short term top has been posted.

Monday's pivot point, our line in the sand is 873

First resistance is last Thursday's high crossing at 887.10.
Second resistance is January's high crossing at 937.00.

First support is the 10 day moving average crossing at 860.52.
Second support is the 20 day moving average crossing at 851.44.

The June S&P 500 Index was up 5.60 points. at 881.70 as of 5:45 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.

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The June Dollar was steady to slightly higher overnight as it consolidates some of last week's decline. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term.

If June extends last week's decline, March's low crossing at 83.14 is the next downside target. Closes above the 20 day moving average crossing at 85.54 would temper the near term bearish outlook in the market.

First resistance is the 10 day moving average crossing at 85.42.
Second resistance is the 10 day moving average crossing at 85.54.

First support is last Thursday's low crossing at 84.03.
Second support is March's low crossing at 83.14.


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Crude Oil Closes Higher, Higher Prices Possible Near Term

June crude oil closed sharply higher on Friday and above the 20 day moving average crossing at 51.54 confirming that a short term low has been posted. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

If June extends this week's rally, the reaction high crossing at 54.81 is the next upside target. Closes below the 10 day moving average crossing at 50.21 are needed to confirm that a short term low has been posted.

First resistance is today's high crossing at 53.65.
Second resistance is the reaction high crossing at 54.81.

First support is the 10 day moving average crossing at 50.21.
Second support is Monday's low crossing at 48.01.

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The June Dollar closed slightly lower on Friday as consolidates some of Thursday rally. The mid range close sets the stage for a steady opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends the decline, March's low crossing at 83.14 is the next downside target. Multiple closes above the 10 day moving average crossing at 85.64 are needed to confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 85.53.
Second resistance is the 10 day moving average crossing at 85.64.

First support is Thursday's low crossing at 84.03.
Second support is March's low crossing at 83.14.

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The June S&P 500 index closed higher on Friday as it extended the rally off March's low. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are diverging but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target. Closes below the 20 day moving average crossing at 849.22 are needed to confirm that a short term top has been posted.

First resistance is Friday's high crossing at 887.10.
Second resistance is January's high crossing at 937.00.

First support is the 10 day moving average crossing at 855.31.
Second support is the 20 day moving average crossing at 849.22.


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Light Trading Volume Expected For May Day Holiday

June crude oil was steady to slightly lower overnight as it consolidates above resistance marked by the 10 day moving average crossing at 50.01.

The commodities markets will be effected by possible light volume on Friday due to the May Day Holiday being celebrated in much of Europe.

Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 51.43 are needed to confirm that a short term low has been posted.

If June renews this month's decline, the reaction low crossing at 45.11 is the next downside target.

Friday's pivot point, our line in the sand is 51.01

First resistance is Thursday's high crossing at 51.94.
Second resistance is the reaction high crossing at 53.21.

First support is Monday's low crossing at 48.01.
Second support is last Tuesday's low crossing at 46.72.

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The June S&P 500 index was higher overnight as it extends the rally off March's low. Stochastics and the RSI are diverging but are neutral to bullish signaling that sideways to higher prices are possible near term.

That being said we see this as a swing day, a great opportunity to go short if we touch the high's of Wednesday. This market is trying to roll over for the bears.

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target. Closes below the 20 day moving average crossing at 849.26 are needed to confirm that a short term top has been posted.

Friday's pivot point, our line in the sand is 873.75

First resistance is Thursday's high crossing at 887.10.
Second resistance is January's high crossing at 937.00.

First support is the 10 day moving average crossing at 855.41.
Second support is the 20 day moving average crossing at 849.26.

The June S&P 500 Index was up 3.70 points. at 873.70 as of 5:59 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.

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The June Dollar was lower overnight as it extends this week's decline. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends this week's decline, March's low crossing at 83.14 is the next downside target. Closes above the 10 day moving average crossing at 85.63 would temper the near term bearish outlook in the market.

First resistance is the 20 day moving average crossing at 85.52.
Second resistance is the 10 day moving average crossing at 85.63.

First support is Thursday's low crossing at 84.03.
Second support is March's low crossing at 83.14.



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Crude Oil Thursday Evening Trading

Click on image to enlarge....

Crude Oil Closes Slightly Higher

June crude oil closed slightly higher on Thursday as it extends the rally off last week's low. The mid range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 51.62 are needed to confirm that a short term low has been posted. Closes below the reaction low crossing at 46.72 would renew this month's decline while opening the door for a possible test of the reaction low crossing at 45.08.

First resistance is today's high crossing at 51.94.
Second resistance is the reaction high crossing at 53.21.

First support is last Wednesday's low crossing at 46.72.
Second support is the reaction low crossing at 45.08.

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The June S&P 500 index closed slightly lower on Thursday as profit taking tempered early gains and the low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are diverging but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target. Closes below the 20 day moving average crossing at 847.51 are needed to confirm that a short term top has been posted.

First resistance is today's high crossing at 887.10.
Second resistance is January's high crossing at 937.00.

First support is the 10 day moving average crossing at 855.04.
Second support is the 20 day moving average crossing at 847.52.

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The June Dollar closed higher due to short covering on Thursday as it consolidated some of Wednesday's decline. The mid range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends the decline, March's low crossing at 83.14 is the next downside target. Multiple closes above the 10 day moving average crossing at 85.80 are needed to confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 85.54.
Second resistance is the 10 day moving average crossing at 85.80.

First support is today's low crossing at 84.03.
Second support is March's low crossing at 83.14.



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Crude Oil Steady Amid Flu Threats, Exxon Reports Lowest Profits In 5 Years

"Crude Oil Is Steady as Swine Flu Threatens Demand, Stocks Rally"
Crude oil was little changed as the World Health Organization said a pandemic declaration may come soon and economic reports signal that the worst of the global recession is over.

Fuel demand may drop as swine flu has the potential of being the first widespread influenza outbreak in 41 years. Initial U.S. jobless claims decreased last week, industrial output in Japan rose for the first time in six months, while U.K. consumer confidence climbed to the highest level in a year.

“We are probably looking at a pandemic which will reduce global growth to some extent,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. “There are increasing signs that the economy is starting to get better. In the end this.....Complete Story

"Shell CEO Says Job Cuts Imminent to Reduce Costs"
Royal Dutch Shell's Chief Executive Officer, Jeroen van der Veer, has confirmed that a reduction in the oil major's employment levels for 2009 is imminent in order to cut costs amid lower oil prices, according to Bloomberg, citing the Financial Times.

Specifically, van der Veer said that Shell must trim its costs to move forward with its intended investment plans while also keeping a close watch on its borrowing expenditures this year.

In March, Shell unveiled its plans to invest between $31-$32 billion in 2009 with dividends for the year expected to be some $10 billion, or a 5% increase of Q1 2009 dividend per share compared.....Complete Story

"Exxon Has Biggest Profit Drop in 5 Years as Oil Falls"
Exxon Mobil Corp., the world’s largest company by market value, posted its lowest profit in more than five years after the global recession sapped energy demand, pulling down oil and gasoline prices.

First quarter net income dropped 58 percent to $4.55 billion, or 92 cents a share, from $10.9 billion, or $2.02, a year earlier, Irving, Texas-based Exxon Mobil said today in a statement. Per-share profit was 3 cents lower than the average of analyst estimates compiled by Bloomberg. The earnings decline was Exxon Mobil’s biggest since 2002.....Complete Story


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Crude Oil Bulls Have The Near Term Advantage

June crude oil was higher overnight and is trading above resistance marked by the 20 day moving average crossing at 51.65.

Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 51.65 are needed to confirm that a short term low has been posted.

If June renews this month's decline, the reaction low crossing at 45.11 is the next downside target.

Thursday's pivot point, our line in the sand is 50.50

First resistance is the overnight high crossing at 51.94.
Second resistance is the reaction high crossing at 53.21.

First support is last Tuesday's low crossing at 46.72.
Second support is the reaction low crossing at 45.11.

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The June Dollar was lower overnight as it extends Wednesday's decline and spiked below support crossing at 84.10. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends this week's decline, March's low crossing at 83.14 is the next downside target. Closes above the 10 day moving average crossing at 85.77 would temper the near term bearish outlook in the market.

First resistance is the 20 day moving average crossing at 85.52.
Second resistance is the 10 day moving average crossing at 85.77.

First support is the overnight low crossing at 84.03.
Second support is March's low crossing at 83.14.

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The June S&P 500 index was higher overnight as it extends the rally off March's low. Stochastics and the RSI are diverging but are bullish signaling that sideways to higher prices are possible near term.

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target. Closes below the 20 day moving average crossing at 848.03 are needed to confirm that a short term top has been posted.

Thursday's pivot point, our line in the sand is 868.50

First resistance is the overnight high crossing at 887.10.
Second resistance is January's high crossing at 937.00.

First support is the 10 day moving average crossing at 856.07.
Second support is the 20 day moving average crossing at 848.03.

The June S&P 500 Index was up 14.40 points. at 883.30 as of 6:04 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.


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Crude Oil Closes Higher, Are Higher Prices Possible Near term?

June crude oil closed higher on Wednesday and the high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 51.57 are needed to confirm that a short term low has been posted. Closes below the reaction low crossing at 46.72 would renew this month's decline while opening the door for a possible test of the reaction low crossing at 45.08.

First resistance is last Friday's high crossing at 51.75.
Second resistance is the reaction high crossing at 53.21.

First support is last Wednesday's low crossing at 46.72.
Second support is the reaction low crossing at 45.08.

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The June Dollar closed lower on Wednesday and extended the decline off this month's high. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends the decline, the reaction low crossing at 84.10 is the next downside target. Multiple closes above the 10 day moving average crossing at 85.87 are needed to confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 85.59.
Second resistance is the 10 day moving average crossing at 85.87.

First support is today's low crossing at 84.24.
Second support is the reaction low crossing at 84.10.

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The June S&P 500 index closed higher on Wednesday as it extended the rally off March's low. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are diverging but remain bullish signaling that sideways to higher prices are possible near term.

If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target. Closes below the 20 day moving average crossing at 844.32 are needed to confirm that a short term top has been posted.

First resistance is today's high crossing at 879.00.
Second resistance is January's high crossing at 937.00.

First support is the 20 day moving average crossing at 844.32.
Second support is last Wednesday's low crossing at 823.10.


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Exxon Mobil Corporation Declares Second Quarter Dividend

The Board of Directors of Exxon Mobil Corporation (NYSE:XOM) today declared a cash dividend of 42 cents per share on the Common Stock, payable on June 10, 2009 to shareholders of record of Common Stock at the close of business on May 13, 2009.

This second quarter dividend compares with $ .40 cents per share paid in the first quarter of 2009.

Through its dividends, the corporation has shared its success with its shareholders for more than 100 years and has increased its annual dividend payment to shareholders for 27 consecutive years.


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Shell Says Rebound Unlikely, Motor Fuel Supplies Decline

"Crude Oil, Gasoline Rise as Supplies of the Motor Fuel Decline"
Crude oil and gasoline rose after a government report showed an unexpected drop in U.S. inventories of the motor fuel as refiners reduced operating rates.

Gasoline supplies declined 4.7 million barrels to 212.6 million last week, the biggest reduction since September, the Energy Department said. Stockpiles were forecast to rise by 200,000 barrels, according to a Bloomberg News survey. Prices also increased after stocks rallied and the dollar dropped.

“Nobody was looking for a gasoline decline of that size,” said Sean Brodrick, natural resource analyst with Weiss Research in Jupiter, Florida. “This shows that refineries are keeping processing rates too low because there’s obviously some demand out there for gasoline.....Complete Story

"Iraq Launches Tenders for 60 Wells in Southern Oil Fields"
Iraq Sunday issued two tenders for foreign companies to drill a total of 60 wells in the country's large oil fields in southern Missan governorate in a bid to increase crude oil output, according to tender document posted on the oil ministry Web site.

The first tender, issued through Missan Oil Co., or MOC, an affiliate of the oil ministry, calls for the drilling of 15 wells in the Halfaya and Amarah oil fields, and another 15 wells in the Abu Ghirab.....Complete Story

"Shell Says Oil Unlikely to Rebound as Profit Slumps"
Royal Dutch Shell Plc, Europe’s largest oil company, said crude prices are unlikely to rebound in the next 12 to 18 months as it reported a 62 percent slump in first-quarter profit.

Net income declined to $3.49 billion, or 57 cents a share, from $9.08 billion, or $1.46, a year earlier, The Hague based company said today in a statement. Excluding inventory changes and one time items, earnings beat analysts’ estimates.

Shell follows BP Plc, its smaller rival, in posting lower earnings after oil prices plunged about $100 from a record. Chief Executive Jeroen van der Veer has pledged to pay out about $10 billion in dividends this year, even as Shell funds the industry’s biggest spending program to revive production growth......Complete Story


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Crude Oil Trades Higher On Weaker Dollar, Fed Announcement Day

Crude is trading higher benefiting from a weakening dollar and the SP 500 showing strength typical of a Fed interest rate announcement day.

June crude oil was higher overnight hinting that the two day correction off last Friday's high might be ending. Stochastics and the RSI are neutral to bullish hinting that a short term low might be in or is near.

Closes above the 20 day moving average crossing at 51.55 are needed to confirm that a short term low has been posted.

If June renews this month's decline, the reaction low crossing at 45.11 is the next downside target.

Wednesday's pivot point, our line in the sand is 49.32

First resistance is the 20 day moving average crossing at 51.55.
Second resistance is the reaction high crossing at 53.21.

First support is last Tuesday's low crossing at 46.72.
Second support is the reaction low crossing at 45.11.

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The June Dollar was lower overnight signaling that a two day short covering bounce off last Friday's low has likely ended. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If June extends last Friday's decline, the reaction low crossing at 84.10 is the next downside target. Closes above the 10 day moving average crossing at 85.88 would temper the near term bearish outlook in the market.

First resistance is the 20 day moving average crossing at 85.60.
Second resistance is the 10 day moving average crossing at 85.88.

First support is last Friday's low crossing at 84.63.
Second support is the reaction low crossing at 84.10.

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The June S&P 500 index was higher overnight as it consolidates above the 10 day moving average crossing at 852.96. Stochastics and the RSI are diverging and are turning neutral warning bulls that a short term top and possible trend change might be near.

Closes below the 20 day moving average crossing at 843.86 are needed to confirm that a short term top has been posted. If June extends the rally off March's low, January's high crossing at 937.00 is the next upside target.

Wednesday's pivot point, our line in the sand is 851

First resistance is the reaction high crossing at 867.00.
Second resistance is January's high crossing at 937.00.

First support is the 20 day moving average crossing at 843.86.
Second support is the reaction low crossing at 823.10.

The June S&P 500 Index was up 8.20 points. at 860.00 as of 5:57 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.

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Key Market Events To Watch For Wednesday............

10:30 AM ET.

Apr 24 US Energy Dept Oil Inventories

Crude Oil Stocks (previous 370.6M)

Crude Oil Stocks (Net Change) (expected +2.3M; previous +3.85M)

Gasoline Stocks (previous 217.3M)

Gasoline Stocks (Net Change) (expected -300K; previous +802K)

Distillate Stocks (previous 142.3M)

Distillate Stocks (Net Change) (expected +200K; previous +2.68M)

Refinery Usage (expected 83.4%; previous 83.4%)


Two-Day FOMC Meeting continues; interest rate decision expected around 2:15 p.m. EDT


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Oil Falls For Second Day, Valero Profits Up

"Oil Falls a Second Day on Concern Swine Flu Will Curb Fuel Use"
Crude oil fell for a second day on concern that fuel demand will drop as the swine-flu outbreak curtails travel and delays a recovery from the global recession.

Oil, gold and copper declined as the World Health Organization raised its global pandemic alert to the highest since the warning system was adopted in 2005, saying the disease is not containable. Crude rose in eight of the past 10 weeks as the stock market climbed on speculation that the economy and energy consumption would rebound later this year.

“There’s a potential that a swine-flu outbreak will crimp economic growth,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “There’s also recognition that the recent rally was overly optimistic. Demand isn’t recovering.....Complete Story

"OPEC Oil Price Eases Early In The Week"
The price for oil produced by the Organization of the Petroleum Exporting Countries (OPEC) shed nearly $0.80 Monday, the group announced Tuesday.

After rising to just below the 50 dollar mark at the end of last week, one barrel (158 liters) of OPEC crude oil fell by $0.76 to settle at $49.21 on Monday.

The Vienna based organization calculates a basket price based on 12 brands produced by its members.....Complete Story

"Valero Energy Profit Rises on Higher Refining Margins"
Valero Energy Corp., the largest U.S. oil refiner, said first-quarter profit rose 18 percent on increased margins for processing crude into gasoline and other petroleum products.

Net income rose to $309 million, 59 cents a share, from $261 million, or 48 cents, a year earlier, San Antonio-based Valero said today in a statement. The per-share results beat by 9 cents the average of 18 analyst estimates compiled by Bloomberg. Sales fell 50 percent to $13.8 billion.

Valero benefited from lower costs and a rebound in gasoline prices as U.S. refiners cut processing rates faced with reduced fuel demand in an economy hobbled by recession. The company earned an average of $8.77 for each barrel of oil it processed in the first quarter.....Complete Story


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Crude Oil Looks To Move Lower On Stronger Dollar, Swine Flu Outbreak

Market news just seems to be building against crude this week. The Mexican Flu outbreak, the stronger dollar and the SP 500 trending lower all are weighing heavily on crude oil. We appear to be range bound in the 48-53 range for now and while the future seems bearish for oil traders they appear more than willing to pile in long when meeting support.

For Tuesday we need to touch 48 for me to start building a scalp/long day trade position. Under 47 we go 100% long. In this market I will be 100% out if we rally any where near 1st resistance at 51.69

Tuesday's pivot point, our line in the sand is 49.85

1st resistance is 51.69
2nd resistance is 53.29

1st support is 48.25
2nd support is 46.41



Market news to watch for.................

4:30 PM ET. Apr 2...API Oil Industry Report

....................Crude Stocks (Net Change) (previous -1.01M)

....................Gasoline Stocks (Net Change) (previous +107K)

....................Distillate Stocks (Net Change) (previous +458K)

....................Refinery Runs (previous 82.1%)


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PetroChina Misses Analyst Estimates, Shell Profits Plummet

"PetroChina First Quarter Net Falls, Trailing Analyst Estimates"
PetroChina Co., the world’s second largest company by market value, posted a profit that trailed analysts’ estimates for the first quarter of what will be its “most challenging” year.

Net income declined 35 percent to 18.96 billion yuan ($2.8 billion) from 29.3 billion yuan a year earlier, the Beijing based company said in a statement to the Shanghai exchange yesterday. That’s worse than a median estimate of 19.5 billion yuan in a Bloomberg survey of three analysts.

China’s economy grew at its weakest pace in nearly a decade in the first quarter, and PetroChina faces “huge difficulties” in 2009 as the global financial crisis reduces demand for oil products, it said last month. Asia’s biggest crude producer said it will cut costs and reduce risk in the second quarter, and China passed a $585 billion stimulus package to revive growth.....Complete Story

"Florida House Members Mull Offshore Drilling Bill"
A bill that would allow oil drilling off Florida's coast is ready for a vote in the state House of Representatives.

Today legislators questioned Rep. Charles Van Zant, R-Keystone Heights, for more than an hour, voicing concern about the bill that would allow the governor and Cabinet to approve drilling leases between 3 and 10.5 miles off the state's coast. They expressed worries that drilling could hurt the tourism industry, the seafood industry, and the environment.

Van Zant assured members that drilling technology has advanced to the point that there is minimal risk. He said opening the coast to oil and natural gas exploration could create thousands of jobs.....Complete Story

"Shell, BP Profits May Drop Most In Five Years On Oil"
Royal Dutch Shell Plc and BP Plc, Europe’s largest oil companies, may post the biggest drop in quarterly earnings in at least five years after the recession dragged down crude prices.

U.S. oil futures averaged $43.31 a barrel in the quarter, 56 percent lower than a year earlier, after plunging from a record $147.27 reached in July. The companies responded by shelving projects and demanding price cuts from suppliers. BP may scale back its joint Sunrise oil-sands project in Alberta to cut expenses, while Shell has said industry costs could fall as much as 50 percent.

“We are going to see a very substantial drop in income and there’s very little they can do about costs in the short-term,” said Colin Morton, who helps manage about $2 billion, including BP and Shell stock, at Rensburg Fund Management in Leeds, England. “It’s going to be quite a tough period.”.....Your keyword


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Crude Oil Market Seems to Have The Flu This Morning

AS we go into regular trading hours on Monday crude oil is down over $3.00, near the 1st support level of $48. Common sense says that most traders will be buying these levels as we appear to be range bound in the 48 - 54 area.

The bears seem to have the technical advantage at this point and we will trade that side of crude oil. We are hesitant to play the long side here as it also looks like the SP 500 is willing to consolidate recent rally gains in the market. We will keep a close eye on the SP's ability to trade within the 830-880 level.

The U.S. dollar is also trading higher this morning further pressing on crude oil prices.

Today's pivot point, our line in the sand is 50.77

1st resistance 52.47
2nd resistance 53.46

1st support 49.78
2nd support 48.08


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OPEC General Sec. See No Cuts But Schlumberger Does

"OPEC Secretary General Doesn't See New Oil Cuts in May"
OPEC Secretary General Abdalla Salem El-Badri said he doesn't expect the oil cartel to cut production when the group meets next month, despite signs of even weaker crude demand and swelling oil inventory in big energy consuming nations. The Organization of Petroleum Exporting Countries needs to fully implement an agreement announced back in December to remove 4.2 million barrels a day from world markets before embarking on more reductions, El-Badri said. "We need to take all that off the market before we can talk about new cuts....Complete Story

"Oil Falls on Speculation Slow Recovery Will Limit Energy Demand"
Crude oil fell for the first time in five days in New York on speculation a slow recovery from the global recession may limit demand. The economy in the U.S., the world’s largest oil consumer, will continue to contract “for some time,” Lawrence Summers, director of the White House National Economic Council, said yesterday. Increased output by non OPEC producers has left the market oversupplied by about 720,000 barrels a day, said Algerian Oil Minister Chakib Khelil. “It’s difficult to see a really sustained rally in oil,” said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. “There are so many downside risks to the global economy....Complete Story

"Schlumberger CFO: Another Headcount Reduction Likely"
Schlumberger's Chief Financial Officer, Simon Avat, said Friday the oilfield services major will likely reduce its employment levels in the coming months, Dow Jones reports. The world's largest oilfield services company, Schlumberger cut some 5,000, or 6%, of its 84,000 global employees in the first round of layoffs announced in January amid a worldwide downturn in oil and gas activity and weakened crude prices. In the last five years, Schlumberger, whose principal offices are in Houston, Paris and The Hague, recruited 11,613 engineers from 140 countries and 8,754 specialists....Complete Story


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