Oil Falls On Fed Warning, Petrobras Expands Abroad, Biggest Drop In Natural Gas In Two Months

"Oil Falls From Six Month High After Fed Warning on U.S. Economy"
Crude oil dropped from a six-month high after the Federal Reserve cut its forecast for the economy of the U.S., the world’s biggest energy-consuming country. Oil fell after minutes of the Fed’s Open Market Committee meeting in April showed that policy makers see “significant downside risks” to the economic outlook. The price decrease accelerated after U.S. jobless claims topped forecasts. Daily fuel demand in the past four weeks declined 7.6 percent from a year earlier, an Energy Department report showed yesterday. “The Fed comments triggered liquidation as we came in today,” said Gene McGillian.....Complete Story

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"Brazil's Lula Sees Petrobras Furthering Investments Abroad"
Brazilian state-run energy giant Petrobras (PBR) shouldn't be afraid to make investments overseas, President Luiz Inacio Lula da Silva said Thursday during a visit to Turkey. "[Overseas investments] will help the company have more access to sources of oil," Lula was quoted by the local Estado news agency as saying. "Gasoline prices, which are already cheap in Brazil, could become even cheaper [with more overseas exploration]." Petrobras will sign an exploration deal with the Turkish Petroleum Corp., or TPAO, Friday. The deal will cover exploration in the Black Sea, which Turkey.....Complete Story

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"Natural Gas Drops Most in 2 Months as Supply Gains in Recession"
Natural gas futures fell the most in eight weeks after a government report showed a bigger than forecast increase in U.S. inventories, as the recession cuts demand for the industrial fuel. Stockpiles rose 103 billion cubic feet last week to 2.116 trillion cubic feet, the Energy Department said. Analysts expected a gain of 95 billion. Supplies were 22 percent higher than the five-year average as factories and power plants trimmed purchases during the worst economic slowdown in a half century.
“This number surprised everyone it appears, so there’s a violent reaction,” said Brad Florer.....Complete Story

Crude Oil Lower As Markets React To Continous Job Claims

Crude oil traded lower overnight as most professional traders are looking for an over due retracement. We are still in a strong uptrend but it is apparent we have made a short term top. I look for bullish day traders to make a stand in the 60.50 - 61 area so watch volume closely as we trade through here, bears will start take profits in the 59+ area.

We will be watching the SP 500 closely as any move below 895.50 will have day traders trading the gap fill to 882.50, most likely taking crude oil with it.

Natural gas seems to be making a test of the 50 and 61.8% retracement lines which will only add to the crude oil sell off. This could be healthy for the bulls case if these levels can hold.

Thursday's pivot point, our line in the sand is 61.27

1st resistance is 62.67
2nd resistance is 63.67

1st support is 60.27
2nd support is 58.87

Crude Oil Closes Near Session High, Hit's New Six Month High

July crude oil closed up $2.05 at $62.15 a barrel today. Prices closed near the session high today and hit a fresh six month high. A lower U.S. dollar is supporting buying interest in crude. Bulls have the near term technical advantage and gained more upside momentum today. A four week old uptrend is in place on the daily bar chart.

July unleaded gasoline closed up 98 points at $1.7853 today. Prices closed near the session low after hitting a fresh six month high early on today. Bulls have upside technical momentum.

July natural gas closed up 7.9 cents at $4.109 today. Prices closed nearer the session high today and were supported on short covering in a bear market. Bears still have the near term technical advantage.

The June U.S. dollar index closed down 95 points at 81.10 today. Prices closed near the session low and hit a fresh 4 1/2 month low today. Prices are still in a 10 week old downtrend on the daily bar chart. Bears still have the near term technical advantage and gained more strength today.

Oil Prices Rise On Supply Decline, Morgan Stanley Trader Banned

"Oil Rises Above $62 on Larger Than Forecast U.S. Supply Decline"
Crude oil rose above $62 a barrel for the first time in six months after a government report showed that U.S. inventories declined more than forecast. Stockpiles dropped 2.11 million barrels to 368.5 million in the week ended May 15, the Energy Department said today. A 400,000-barrel decline was forecast, according to a Bloomberg News survey. Prices also climbed after refinery fires and unrest in Nigeria threatened supplies and the falling dollar spurred investors to purchase raw materials.

“We’re off to the races,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “The crude and gasoline inventory drops are very supportive to the market. The problems in Nigeria and refinery disruptions are contributing to the rally.....Complete Story

"Valero Energy Agrees to Acquire Interest in European Refining Assets"
Valero Energy Corporation has entered into an agreement to acquire The Dow Chemical Company's 45% interest in the Total Raffinaderij Nederland N.V. (TRN) for an enterprise value expected to be approximately $725 million, including working capital and inventories. TRN owns a crude oil refinery located in the Zeeland region of The Netherlands on the river Scheldt and has total throughput capacity of 190,000 barrels per day.

The transaction is subject to regulatory approval as well as a right-of-first refusal held by Total S.A., the refinery operator and owner of the remaining 55% interest in TRN. The transaction is expected to close in the third quarter of 2009.
Originally built in 1973, TRN's refinery received major upgrades in the mid-1980s, mid-1990s, and.....Complete Story

"Ex Morgan Stanley Trader Banned for Hiding Position"
A former oil trader at Morgan Stanley in London, who shorted oil futures without permission after an alcohol-fuelled lunch, has been banned by Britain’s financial regulator for trying to conceal his trades, the second time in a week it took action against one of the bank’s employees.

The Financial Services Authority banned David Connor Redmond, a former trader on the freight desk of Morgan Stanley’s commodities division, the regulator said today in a statement. Redmond built a “substantial” short position in WTI Futures on the ICE Futures Web-based trading platform in February 2008, concealing the position overnight and exposing Morgan Stanley to “the risk of incurring a significant loss,” the FSA said.....Complete Story

Lower Costs Give Crude Oil Drillers Some Breathing Room

A long awaited drop in the cost of drilling and maintaining wells has finally materialized, easing the pressure on oil and natural gas producers whose profits are being squeezed by lower prices.

Executives at the companies that own and develop fields complained for months that as tumbling energy prices ate into revenue, margins were being hurt by the stubbornly high cost of materials, labor and drilling services needed to get oil and gas out of the ground. In recent weeks, that has finally begun to change.

Lower costs, along with a modest rebound in oil prices to more than $55 a barrel, helped several companies deliver better-than-expected earnings in the first quarter.
Complete Story

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Crude Oil Overbought, Signals Still Turning Bullish

July crude oil was higher overnight as it extends this week's rally. Stochastics and the RSI are overbought, diverging but are turning bullish signaling that sideways to higher prices are possible near term.

If July extends this spring's rally, the 25% retracement of the 2008-2009 decline crossing at 68.49 is the next upside target. Closes below the 20 day moving average crossing at 56.37 are needed to confirm that a short term top has been posted.

Wednesday's pivot point, our line in the sand is 60.12

First resistance is Tuesday's high crossing at 60.99
Second resistance is the 25% retracement level crossing at 68.49

First support is last Friday's low crossing at 56.74
Second support is the 20 day moving average crossing at 54.37

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The June Dollar was steady to slightly higher overnight as it consolidated some of Tuesday's decline. Stochastics and the RSI are oversold, diverging but turning bearish again signaling that additional weakness is possible near term.

If June extends the decline off April's high, the 87% retracement level of the December-March rally crossing at 81.49 is the next downside target. Closes above the 20 day moving average crossing at 83.77 would confirm that a short term low has been posted.

First resistance is Monday's high crossing at 83.33
Second resistance is the 20 day moving average crossing at 83.77

First support is Tuesday's low crossing at 81.97
Second support is the 87% retracement level crossing at 81.49

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The June S&P 500 index was higher overnight as it consolidates above the 10 day moving average crossing at 902.68. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term.

If June extends this week's rally, this month's high crossing at 929.00 is the next upside target. Closes below Monday's low crossing at 875.40 would confirm that a short term top has been posted.

I look for the day trading bulls to flood in on any pull back into the 895-899 range, selling into the pivot point before the end of the day,

Wednesday's pivot point, our line in the sand is 909

First resistance is Tuesday's high crossing at 915.80
Second resistance is this month's high crossing at 929.00

First support is the 10 day moving average crossing at 902.68
Second support is Monday's low crossing at 875.40

The June S&P 500 Index was up 2.50 points. at 909.00 as of 5:55 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.

10:30 AM Eastern Time

US Energy Dept Oil Inventories

Crude Oil Stocks (previous 370.6M)

Crude Oil Stocks (Net Change) (expected -700K; previous -4.7%)

Gasoline Stocks (previous 208.3M)

Gasoline Stocks (Net Change) (expected -1.2M; previous -4.1%)

Distillate Stocks (previous 147.5M)

Distillate Stocks (Net Change) (expected 700K; previous +1%)

Refinery Usage (expected 84%; previous 83.7%)

Weaker U.S. Dollar Supports Crude Oil Uptrend

June crude oil closed up $0.62 at $59.65 a barrel today. Prices closed near mid range today and did hit a fresh 5 1/2 month high. A weaker U.S. dollar is supporting buying interest in crude. Bulls have the near term technical advantage. A four week old uptrend is in place on the daily bar chart.

June natural gas closed down 19.0 cents at $3.949 today. Prices closed nearer the session low today. Bears still have the near term technical advantage and are regaining downside momentum.

The June U.S. dollar index closed down 72 points at 82.03 today. Prices closed near the session low and closed at a fresh 4 1/2 month low today. Prices are still in a 10 week old downtrend on the daily bar chart. Bears still have the near term technical advantage and gained more strength today.

The U.S. stock indexes closed mixed today after solid gains posted on Monday. Bulls still have some fresh upside near-term technical momentum. Bears are anticipating the "sell in May and go away" phenomenon that has occurred in the past. However, the recent rally in stocks has surprised most with its resilience. Too many analysts expecting a downturn has actually prolonged the rally.

Crude Oil Fluctuates Along With Equities, Supply May Decline

Crude oil futures fluctuated along with the stock market and on speculation that a government report tomorrow will show U.S. stockpiles and demand dropped. Oil and U.S. equities swung between gains and losses as housing starts unexpectedly dropped to an all time low. Crude oil stockpiles probably dropped 1.5 million barrels last week, according to a Bloomberg News survey conducted before an Energy Department report tomorrow. “A lot of oil traders are looking at equity markets for a signal of what the economy and demand picture will look like in the months ahead,” said Tim Evans, an energy analyst with.....Complete Story

Crude Oil Rally May Be Tempered By Housing Numbers

June crude oil was higher overnight and posted a new high for the month thereby renewing the rally off April's low. Stochastics and the RSI are overbought, diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near term. But worse then expected housing numbers this morning have demand concerns looming again and this may be enough to take us back to the 54-55 range that so many professional traders are calling the new bottom.

If June extends this spring's rally, the reaction high crossing at 65.00 is the next upside target. Closes below the 20 day moving average crossing at 54.72 are needed to confirm that a short term top has been posted.

Tuesday's pivot point, our line in the sand is 58.79

First resistance is the overnight high crossing at 60.48
Second resistance is the reaction high crossing at 65.00

First support is last Friday's low crossing at 56.07
Second support is the 20 day moving average crossing at 54.72

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The June Dollar was lower overnight and trading below the 75% retracement level of the December-March rally crossing at 827.50. Stochastics and the RSI are oversold, diverging are turning neutral to bullish hinting that a short term low might be in or is near. Closes above the 10 day moving average crossing at 82.90 would temper the near term bearish outlook in the market.

If June extends the decline off April's high, the 87% retracement level of the December-March rally crossing at 81.49 is the next downside target.

First resistance is Monday's high crossing at 83.33
Second resistance is the 20-day moving average crossing at 83.99

First support is last Wednesday's low crossing at 81.98
Second support is the 87% retracement level crossing at 81.49

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The June S&P 500 index was higher overnight as it extends Monday's rally above the 10 day moving average crossing at 904.53. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near term.

For Tuesday day traders will be looking at two unfilled gaps. 924.75 to the upside and 882.25 to the downside. Everything looks bullish today so look for traders to go long over the daily pivot point with the first round of selling at the half gap fill 916.50. We may be looking at a double top if the bulls take us to the 924.75 area and beyond.

This morning's housing numbers may have a different idea as stocks like the XHB [homebuilders ETF] are reacting negatively to the numbers in pre market trading.

If June extends this week's rally, this month's high crossing at 929.00 is the next upside target. Closes below the 20 day moving average crossing at 886.33 would confirm that a short term top has been posted.

Tuesday's pivot point, our line in the sand is 902

First resistance is the overnight high crossing at 915.80
Second resistance is this month's high crossing at 929.00

First support is the 20 day moving average crossing at 886.33
Second support is the 25% retracement, this spring's rally crossing at 862.80

The June S&P 500 Index was up 7.80 points. at 914.90 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.

Crude Oil Closes Sharply Higher, Sets Up Higher Open On Tuesday

June crude oil closed sharply higher on Monday as it consolidated some of last week's decline. The high range close sets the stage for a steady to higher opening on Tuesday.

Stochastics and the RSI are neutral to bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 54.16 are needed to confirm that a short term top has been posted.

If June renews the rally off April's low, the reaction high crossing at 61.33 is the next upside target.

First resistance is last Tuesday's high crossing at 60.08
Second resistance is the reaction high crossing at 61.33

First support is last Friday's low crossing at 56.07
Second support is the 20 day moving average crossing at 54.16

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June Henry natural gas closed higher on Monday due to short covering as it consolidates some of last week's decline. The mid range close sets the stage for a steady opening on Tuesday.

Stochastics and the RSI have turned bearish warning bulls to use caution as a short term top might be in or is near. Closes below the 20 day moving average crossing at 3.828 are needed to confirm that a short term top has been posted.

If June renews this month's rally, March's high crossing at 4.609 is the next upside target.

First resistance is last Wednesday's high crossing at 4.575
Second resistance is March's high crossing at 4.609

First support is today's low crossing at 3.997
Second support is the 20 day moving average crossing at 3.828

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The June Dollar closed lower on Monday and the low range close sets the stage for a steady to lower opening on Tuesday. However, stochastics and the RSI are turning neutral to bullish hinting that a short term low might be in or is near. Multiple closes above the 20 day moving average crossing at 84.23 are needed to confirm that a short term low has been posted.

If June extends this month's decline, the 87% retracement level of the December-March rally crossing at 81.49 is the next downside target.

First resistance is the 10 day moving average crossing at 83.11
Second resistance is the 20 day moving average crossing at 84.23

First support is last Wednesday's low crossing at 81.98
Second support is the 87% retracement level crossing at 81.49

Gasoline Ending Biggest Rally in Decade, Oil Rises Above $59 on Nigerian Threats

"Gasoline Ending Biggest Rally in Decade as Driving Season Opens"
Gasoline’s biggest springtime rally in more than a decade may be ending before U.S. motorists start hitting the road as vacation season begins and demand peaks. Gasoline futures will average $1.40 a gallon during the summer, a 17 percent decline from May 15, according to surveys of five analysts by Bloomberg. Refiners are finishing seasonal shutdowns to increase production just as the global recession reduces oil demand by the most since 1981 and U.S. imports rise. Bets that gasoline will fall below $1.40 by May 26.....Complete Story

"US Commander: Iraqi Navy to Run Offshore Oil Platform"
Iraq's navy could be fully responsible for the defence of one of two key offshore oil platforms by December, according to the senior US and coalition commander in the Persian Gulf. "We have just turned over the point defense responsibility of the northern Khawr Al Amaya Oil Terminal (KAAOT) to the Iraqi Navy and our intention is turn over the security responsibility for the entire area around the platform by the end of December," said Vice Admiral William Gortney on Sunday. Gortney is the commander of the US naval forces.....Complete Story

"Oil Rises Above $59 on Nigerian Threats, Sunoco Refinery Fire"
Crude oil rose above $59 a barrel after a Nigerian militant group threatened to block waterways used for energy exports and as an explosion and fire at a Sunoco Inc. refinery “impacted” operations in the U.S. Northeast. The Movement for the Emancipation of the Niger Delta said in an e-mailed statement that ships moving through the southern part of the nation would be traveling at their own risk. Sunoco, the largest refiner in the Northeast, said the incident at the Marcus Hook plant, located on the border of Pennsylvania and Delaware, took place late yesterday.
.....Complete Story


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Crude Oil Higher, Lower Prices Still Likely Near Term

June crude oil was higher Sunday evening due to short covering as it consolidates some of last Friday's decline. As I write crude is up $1.74 at 58.10 well above our pivot point of 57.14. However, stochastics and the RSI have turned bearish signaling that sideways to lower prices are still possible near term.

More than ever we are pitted against the dollar. Professional traders expect the Euros rally against the dollar to be short lived for the near term, however government policies right now are based on making the dollar as weak as possible making another crude bull rally waiting right around the corner.

Closes below the 20 day moving average crossing at 54.07 are needed to confirm that a short term top has been posted.

If June renews this spring's rally, the reaction high crossing at 65.00 is the next upside target.

Monday's pivot point is 57.14

First resistance is last Tuesday's high crossing at 60.08.
Second resistance is the reaction high crossing at 65.00.

First support is last Friday's low crossing at 56.07.
Second support is the 20 day moving average crossing at 54.07.

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The June Dollar was lower overnight as it consolidates some of last Friday's rally but remains above the 75% retracement level of the December-March rally crossing at 827.50. Stochastics and the RSI are oversold but are turning bullish hinting that a short term low might be in or is near. Closes above the 10 day moving average crossing at 83.14 would temper the near term bearish outlook in the market.

If June renews the decline off April's high, the 87% retracement level of the December-March rally crossing at 81.49 is the next downside target.

First resistance is the 10 day moving average crossing at 83.14.
Second resistance is the 20 day moving average crossing at 84.25.

First support is last Wednesday's low crossing at 81.98.
Second support is the 87% retracement level crossing at 81.49.

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The June S&P 500 index was higher overnight due to short covering as it consolidates above support marked by the 20 day moving average crossing at 881.90. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

Closes below the 20 day moving average crossing at 881.90 would confirm that a short term top has been posted while opening the door for a larger degree decline this spring. Closes above the 10 day moving average crossing at 901.16 would temper the near term bearish outlook in the market.

Monday's pivot point, our line in the sand is 885.25

First resistance is the 10 day moving average crossing at 901.16
Second resistance is the reaction high crossing at 929.00

First support is the 20 day moving average crossing at 881.90
Second support is the 25% retracement, this spring's rally crossing at 862.80

The June S&P 500 Index was up 2.70 points. at 885.70 as of 6:02 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day sessio
n begins later this morning.


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Gas prices Rise, Iraqi Gas Headed For Europe

"U.S. Gasoline Price Rises to $2.3010 a Gallon, Lundberg Says"
The average price of regular gasoline at U.S. filling stations rose to $2.3010 a gallon as refiners cut production and inventories fell to the lowest since December. Regular gasoline climbed 24.61 cents in the three weeks ended May 15, according to a survey of 5,000 filling stations nationwide by Trilby Lundberg, an independent gasoline analyst. That’s an average 8.2 cents more a week, the biggest increase on that basis in a year. “Between our two survey dates this year, crude oil prices increased nearly $5 a barrel,” Lundberg said today in an interview. Gasoline consumption.....Complete Story

"US Geological Survey Spies 'Promising' Hydrate Reserve in GOM"
A research team led by the U.S. Geological Survey in search of producible hydrate to add to the nation's energy portfolio has identified "the most promising" gas hydrate deposits yet in the Gulf of Mexico, according to a report by Reuters. Researched for years as a potential new energy source, gas hydrate is a combination of nearly pure methane and water frozen by low temperatures and high pressures in permafrost or beneath the sea, the report noted. Prolific throughout the world, gas hydrate has not been commercially viable since most finds have been too shallow to tap for production.....Complete Story

"OMV, Mol Buy 20% of Iraqi Gas Producer to Supply Fuel to Europe"
OMV AG, central Europe’s biggest oil company, and Hungary’s Mol Nyrt. bought a combined 20 percent of an Iraqi natural-gas producer in a cash-and-stake deal, as part of a plan to supply gas to Europe through the Nabucco pipeline. OMV will pay $350 million for a 10 percent stake in Pearl Petroleum, which holds the United Arab Emirates’ Dana Gas PJSC and Crescent Petroleum’s upstream interests in the Kurdistan region of Iraq, the companies said in a statement today. Mol will own 10 percent of Pearl in exchange for Dana and Crescent each becoming 3 percent shareholders in the Hungarian refiner.....Complete Story


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Crude Oil Closes Lower, Lower Opening Monday Is Likely

June crude oil closed lower due to profit taking on Friday and below initial support marked by the 10 day moving average crossing at 57.06. The low range close sets the stage for a steady to lower opening on Monday.

Stochastics and the RSI are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 53.65 are needed to confirm that a short term top has been posted.

Most professional crude oil traders are looking at the $54 dollar range as the line in the sand. If we can break down through that level $49 dollars should be right around the corner. Momentum in the market correction's of the Dow, SP 500 and Nasdaq make that likely at this point.

If June renews the rally off April's low, the reaction high crossing at 61.33 is the next upside target.

First resistance is Tuesday's high crossing at 60.08
Second resistance is the reaction high crossing at 61.33

First support is today's low crossing at 56.51
Second support is the 20 day moving average crossing at 53.65

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The June Dollar closed higher due to short covering on Friday as it consolidates some of this month's decline. The high range close sets the stage for a steady to higher opening on Monday.

Stochastics and the RSI are oversold and are turning neutral to bullish hinting that a short term low might be in or is near. Multiple closes above the 20 day moving average crossing at 84.44 are needed to confirm that a short term low has been posted.

If June extends this month's decline, the 87% retracement level of the December-March rally crossing at 81.49 is the next downside target.

First resistance is the 10 day moving average crossing at 83.25
Second resistance is the 20 day moving average crossing at 84.44

First support is Wednesday's low crossing at 81.98
Second support is the 87% retracement level crossing at 81.49

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The June S&P 500 index closed lower on Friday as it extended this week's decline. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

Closes below the 20 day moving average crossing at 879.21 are needed to confirm that a short term top has been posted. Closes above the 10 day moving average crossing at 902.77 would temper the near term bearish outlook in the market.

If June renews the rally off March's low, January's high crossing at 937.00 is the next upside target.

First resistance is the 10 day moving average crossing at 902.77
Second resistance is last Thursday's high crossing at 929.00

First support is the 20 day moving average crossing at 879.21
Second support is the reaction low crossing at 838.80

Crude Oil Futures Fall Amid Speculation Fuel Demand May Decline

"Crude Oil Futures Fall Amid Speculation Fuel Demand May Decline"
Crude oil fell the most in almost a month on concern the global economic recovery may falter, reducing demand for fuel. Crude futures may decline next week as the recession lowers consumption and bolsters U.S. supplies, a Bloomberg News survey of analysts showed. Industrial production in the U.S. fell for a sixth month in April as output at factories, mines and utilities decreased 0.5 percent, according to a report today from the Federal Reserve in Washington. “It’s still about the economy,” said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. “If the bulls are going to reignite their bullish passion.....Complete Story

"Chevron to Proceed with Investment Plan in South Asia"
U.S. based oil giant Chevron Corp. (CVX) plans to move ahead with investments in South Asia amid an expected strong economic recovery in the overall region. "Asia will have the quickest recovery to feed future demand growth. We have strategic locations in Asia to support growth in the long term," Joe Geagea, managing director for Chevron Asia South Ltd., said at a press conference in Bangkok. "We're not stopping anything in the region. Asia is the engine of growth." Chevron's assets in South Asia cover Bangladesh, Cambodia, China, Myanmar, Thailand and Vietnam. Production from these.....Complete Story

"Gasoline May Pull Down Other Oils, PVM Says: Technical Analysis"
Gasoline futures may lead crude oil, heating oil and gasoil as much as 5 percent lower should the motor fuel drop below its eight day moving average, a director of PVM Oil Associates Ltd. said. The five main oil contracts, including U.S. and North Sea crude, all traded below their eight day averages during intraday trading yesterday, with Brent crude settling below the average. Gasoline is the best-performing energy commodity, having gained 71 percent this year. June gasoline was little changed at.....Complete Story


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Short Term Top May Be In For Crude Oil

June crude oil was lower due to strength in the U.S. Dollar and profit taking overnight as it continues to consolidate some of the rally off April's low. Professional traders seem determined to buy the dips but stochastics and the RSI are overbought and are turning bearish signaling that a short term top might be in or is near.

At this point crude appears to be joined at the hip with the equity markets. The obvious correction in the markets has future demand destruction limiting the upside in crude oil. Keep an eye on Natural Gas though, as any continued rally in Nat Gas will take crude higher with it.

Closes below the 20 day moving average crossing at 53.72 are needed to confirm that a short term top has been posted. If June renews this spring's rally, the reaction high crossing at 65.00 is the next upside target.

Friday's pivot point is 58.06

First resistance is Tuesday's high crossing at 60.08
Second resistance is the reaction high crossing at 65.00

First support is the 10 day moving average crossing at 57.20
Second support is the 20 day moving average crossing at 53.72

======================================================================================

The June Dollar was higher overnight due to short covering as it consolidates around the 75% retracement level of the December-March rally crossing at 827.50. Stochastics and the RSI are oversold but are turning neutral to bullish hinting that a short term low might be in or is near. Closes above the 10 day moving average crossing at 83.20 would temper the near term bearish outlook in the market.

If June extends the decline off April's high, the 87% retracement level of the December-March rally crossing at 81.49 is the next downside target.

First resistance is the 10 day moving average crossing at 83.20
Second resistance is the 20 day moving average crossing at 84.42

First support is Wednesday's low crossing at 81.98
Second support is the 87% retracement level crossing at 81.49

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The June S&P 500 index traded lower overnight as it consolidates above support marked by the 20 day moving average crossing at 879.44. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

If the SP moves into the 892.50 area we look for the bears to make an entry, while crossing that point will easily allow the bulls to take us from 896 to 900.75. The consumer price index numbers and OPEX will influence the market today.

Closes below the 20 day moving average crossing at 879.44 would confirm that a short term top has been posted while opening the door for a larger degree decline this spring. Closes above the 10 day moving average crossing at 903.22 would temper the near term bearish outlook in the market.

Friday's pivot point, our line in the sand is 888.75

First resistance is the 10 day moving average crossing at 903.22
Second resistance is last Thursday's high crossing at 929.00

First support is the 20 day moving average crossing at 879.44
Second support is the 25% retracement, this spring's rally crossing at 862.80

The June S&P 500 Index was down 2.80 points. at 886.70 as of 6:01 AM CST. Overnight action sets the stage for a lower opening by the June S&P 500 index when the day session begins later this morning.


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Where do you think crude oil is headed? Please feel free to let our readers know what you think and leave a comment!


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Crude Oil Rises as U.S. Equities Advance, Dollar Declines

"Crude Oil Rises as U.S. Equities Advance, Dollar Declines"
Crude oil rose after U.S. equities increased and the dollar dropped against the euro, bolstering the appeal of energy futures as an alternative investment. Oil rose after the Standard & Poor’s 500 Index ended a three-day losing streak. The dollar dropped as rising stock prices reduced the need for a refuge. Energy prices fell earlier when the International Energy Agency said world oil consumption will drop this year by the most since 1981.....Complete Story

"ConocoPhillips CEO Sees Positives with Crude at $70/Barrel"
ConocoPhillips CEO James Mulva said Wednesday that rising oil prices are an encouraging sign the economy is improving and could help spur new investment by the oil and gas industry after a global recession put a chill on activity in recent months. But prices may need to go higher still before ConocoPhillips boosts its spending again in the Oil Patch. Longer term, an oil price in the neighborhood of $70 is "a good enough price for us to be making investments to replace our resources and grow production.....Complete Story

"IEA Cuts Oil Demand Outlook as Recession Lingers"
The International Energy Agency cut its oil-demand forecast for a ninth consecutive month, predicting consumption this year will fall the most since 1981 as the recession lingers. The Paris-based adviser to 28 nations cut its global oil demand estimate “slightly” to 83 1/2 million barrels a day this year, down 3 percent from 2008, it said today in its monthly report. That is 230,000 barrels a day lower than it forecast last month. The revision comes a day after OPEC reduced its 2009 forecast, predicting oil.....Complete Story


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Crude Oil Lower On Demand Concerns and Jobless Claims

June crude oil was lower due to profit taking overnight as it consolidates some of the rally off April's low. Stochastics and the RSI are overbought and are turning bearish signaling that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 53.35 are needed to confirm that a short term top has been posted.

Crude oil is struggling against a slightly higher dollar and worse then expected jobless claims and unemployment data.

If June renews this spring's rally, the reaction high crossing at 65.00 is the next upside target.

Thursday's pivot point, our line in the sand is 58.34

First resistance is Tuesday's high crossing at 60.08
Second resistance is the reaction high crossing at 65.00

First support is the 10 day moving average crossing at 56.54
Second support is the 20 day moving average crossing at 53.35

10:30 AM ET. May 8

EIA Natl Gas Inventories, in billion cubic feet

Total Working Gas in Storage (previous 1918)

Total Working Gas in Storage (Net Change) (previous +95)

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The June Dollar was higher overnight due to short covering as it consolidates around the 75% retracement level of the December-March rally crossing at 827.50. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.

If June extends the decline off April's high, the 87% retracement level of the December-March rally crossing at 81.49 is the next downside target. Closes above the 10 day moving average crossing at 83.44 would temper the near term bearish outlook in the market.

First resistance is the 10 day moving average crossing at 83.44.
Second resistance is the 20 day moving average crossing at 84.62.

First support is Wednesday's low crossing at 81.98.
Second support is the 87% retracement level crossing at 81.49.

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The June S&P 500 index was lower overnight and tested support marked by the 20 day moving average crossing at 878.09. The pre market trading session is trying to digest worse then expected jobless and unemployment numbers so it is no surprise that Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term.

We are looking at a trading range of 880 - 887 and traders are looking closely at the 50% retracement level of 875.75 to go long.

Closes below the 20 day moving average crossing at 878.09 would confirm that a short term top has been posted while opening the door for a larger degree decline this spring. Closes above the 10 day moving average crossing at 901.50 would temper the near term bearish outlook in the market.

Thursday's pivot point, our line in the sand is 892.25

First resistance is the 10 day moving average crossing at 904.50
Second resistance is last Thursday's high crossing at 924

First support is the 20 day moving average crossing at 873.75
Second support is the 25% retracement, this spring's rally crossing at 861.50

First weekly support is 891.50

The June S&P 500 Index was down 2.00 points. at 883.30 as of 6:06 AM CST. Overnight action sets the stage for a lower opening by the June S&P 500 index when the day session begins later this morning.


Today’s Stock Market Club Trading Triangles



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Crude Oil Closes Lower On Demand Concerns

June crude oil closed lower due to profit taking on Wednesday as it consolidated some of the rally off April's low. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If June extends the rally, the reaction high crossing at 61.33 is the next upside target. Closes below the 20 day moving average crossing at 53.12 are needed to confirm that a short term top has been posted.

First resistance is Tuesday's high crossing at 60.08
Second resistance is the reaction high crossing at 61.33

First support is the 10 day moving average crossing at 55.98
Second support is the 20 day moving average crossing at 53.12

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The June Dollar closed higher due to short covering on Wednesday as it consolidates some of this month's decline but remains below the 75% retracement level of the December-March rally crossing at 82.50. The high range close sets the stage for a steady to higher opening on Thursday.

Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.

If June extends the decline, the 87% retracement level of the December-March rally crossing at 81.49 is the next downside target. Multiple closes above the 20 day moving average crossing at 87.76 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 83.65
Second resistance is the 20 day moving average crossing at 84.76

First support is today's low crossing at 81.98
Second support is the 87% retracement level crossing at 81.49

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The June S&P 500 index closed lower on Wednesday and below the 10 day moving average crossing at 900.05 signaling that a short term top has been posted. The low range close sets the stage for a steady to lower opening on Thursday.

Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 876.88 are needed to confirm that a short term top has been posted.

If June renews the rally off March's low, January's high crossing at 937.00 is the next upside target.

First resistance is last Thursday's high crossing at 929.00
Second resistance is January's high crossing at 937.00

First support is the 20 day moving average crossing at 876.88
Second support is the reaction low crossing at 838.80



Today’s Stock Market Club Trading Triangles



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Crude Oil Falls, OPEC Raises Output

"Crude Oil Falls More Than $1 as Equities Decline, Demand Drops"
Crude oil fell after U.S. equities dropped on a report showing that retail sales unexpectedly declined in April and fuel demand plunged to a 10 year low. Oil dropped as much as 2 1/2 percent as stocks slipped after the Commerce Department said that purchases at U.S. stores decreased 0.4 percent last month. An Energy Department report showed that that fuel use fell to the lowest level since May 1999. Prices rose earlier when the report showed.....Complete Story

"Energy Companies Pounce on Price, Equities Rally by Raising Capital"
Independent crude oil and natural gas producers are taking advantage of the commodity price and broader stock market rally by raising capital. The flurry of deals, however, masks the varying degrees of financial health among companies in the sector. Better capitalized companies, which tend to be larger, are using the opportunity to build up cash reserves to invest in growth. Many smaller firms, meanwhile, had overextended themselves when oil and gas prices were at all time record highs and are.....Complete Story

"OPEC Raised Oil Output for the First Time Since July"
The Organization of Petroleum Exporting Countries boosted oil production last month for the first time since July, exceeding its quota by 967,000 barrels a day and backtracking its implementation of supply cuts intended to stem falling prices. The 11 OPEC members bound by targets implemented 77 percent of planned output cuts of 4 1/2 million barrels a day, down from a revised 82 percent for March, the Vienna based organization said.....Complete Story



Today’s Stock Market Club Trading Triangles



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