Natural Gas: Extreme Contango Suggests Caution for E&P Companies

The price of Natural Gas is hovering just below $3, which is about the median price over the past two decades. Or is it? While the spot price has garnered lots of headlines recently for its collapse, the future price has declined much much less so. The quoted price for a year from now is above $5. Clearly the spot price is very depressed relative to the future price. In fact, it is at a record percentage differential. In the chart below (click to enlarge), I have divided the one year forward price by the 1-month forward price. The mean spread has been 6%. You will see I included lines for +/- 2 standard deviations as well. The current relationship is more than 4 standard deviations from the mean. At this point.....Read the entire article

Where is Oil Headed Next Week?

CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed next week.

Despite sliding prices, the LNG keeps coming

Despite the steady drop in natural gas prices, Gulf Coast liquefied natural gas terminals are expecting a steady stream of shipments in the coming weeks. Cheniere Energy’s Sabine Pass terminal received an LNG shipment at its dock this week and a second tanker is due by the middle of next week. And the Trunkline LNG terminal in Lake Charles, La., could see as many as three new tanker loads of LNG in the coming weeks, according to Waterborne Energy, a Houston-based LNG market tracking firm. “The last place you would expect to see a potential 20 bcf build in LNG imports in today's weak natural gas environment would be the U.S. Gulf,” Waterborne Energy said in a report Thursday.....Read the entire article

Gold Shines Again While Crude Loses Glitter

Star of the week was obviously gold which broke out of recent broad trading range and set to resume the long uptrend with target above 1000. We find the rally impressive as the dollar remained range bounded. While momentum looks strong, we would be more convinced that the precious metal will make new high above 1033.9 if a close above 1000 is seen. We will have 3 central bank meetings in the coming week, namely RBNZ, BOE and BOC. While we expect no change in monetary policies, policymakers' outlook on economic development and exit strategies from stimulus should provide guidance on currency and gold movements.On the other hand, crude oil's rally has lost steam after jumping to 75. Focus next week will be OPEC's meeting, although it's broadly anticipated that the cartel will not alter production quota. In coming months, crude oil should trade within a range of 65-75.....Read the entire article

Why $200 Oil Is Just Around the Corner

Jeff Rubin believes that oil prices are going to escalate much higher. In his book "Why Your World is About to Get a Whole Lot Smaller," Rubin foretells $200 oil and a vastly transformed global economic picture coming into focus very soon. The premise of Rubin's book is that oil is a finite resource and so called "easy" oil is waning. Inevitably production will be unable to keep up with the growing demand worldwide, and the price of oil will skyrocket.

The chief economist at CIBC World Markets in Canada for 20 years, Rubin correctly predicted the price of oil reaching $50 in 2005 and $100 in 2007. No one believed him then, either. "There continues to be widespread skepticism regarding my oil price forecast," Rubin told Rigzone. "As I noted in the book, few people have ever changed their minds during the entire history of the peak oil debate, at least insofar as 'experts' are concerned".....Read the entire article

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Technical Analysis: Crude Oil Is on ‘Slippery Slope’ Toward $60

Crude oil is on a “slippery slope” after failing to break through resistance and is set to test support at $60.43 a barrel, according to technical analysis by Auerbach Grayson, a brokerage in New York. The failure of October oil futures to breach $75.27, the June 11 high, has made crude vulnerable to “significant decline,” according to Richard Ross, a technical analyst at Auerbach Grayson. Futures dropped more than $7 since touching $75 a barrel on Aug. 25. “We are right on a precipice here and are at a very important inflection point,” Ross said in a telephone interview. Settling below $68 a barrel yesterday “opens the door to testing $65 and $60.43, which was the low on July 13”.....Read the entire article

Mexico's Calderon: BP's Deepwater Find A Wake Up Call

Mexico needs more reforms to rapidly tackle the deep waters of the Gulf of Mexico and shore up plummeting domestic oil production, President Felipe Calderon said Thursday. Calderon said BP PLC's giant deepwater oil discovery in the Tiber field, announced Wednesday, should serve as a wake up call for Mexico. State run Petroleos Mexicanos is legally blocked from teaming up with foreign oil companies that have more experience in the area."I hope this sign from the Gulf of Mexico tells us something," said Calderon in a radio interview.....Read complete article

Gas May Drop From Seven Year Low to $2, Options Show

Natural gas futures are poised to fall further after trading at the lowest in seven years in New York as stockpiles grew to a record for this time of year, according to options data and analysts. The cleaner burning fuel, down 56 percent this year, may plunge another 20 percent to below $2 per million British thermal units as new liquefied natural gas supplies come on stream, said Tony Regan, a consultant for Singapore based Tri-Zen International. Trading of bearish options on the U.S. Natural Gas Fund rose to a record as investors bet that the exchange traded fund tracking gas futures will keep tumbling.....Read entire article

Great Post From One of my Favorite Bears......When This Whole Thing is Over

One of the biosphere's most popular bears [in his defense, it is a bear market] is Atilla Demiray. He is one of the key figures at the wildly popular and controversial xtrends blog. He was kind enough to share his current chart work on crude oil and it is a treat. Look it over and please leave a comment on what you think, good or bad!

Click the chart to enlarge....


Check out his recent post When this whole thing is over...

Natural Gas Dips to Lowest Since March 2002 on Inventory Gain

Natural gas futures fell in New York to the lowest level since March 2002 after a government report showed stockpiles expanded more than average to a record for this time of year. Supplies rose 65 billion cubic feet in the week ended Aug. 28 to 3.323 trillion cubic feet, the Energy Department said. Inventories are the highest for that week since the department began publishing data in 1993. Stockpiles typically gained 64 billion cubic feet for the period in the past five years. “We’re well supplied and there’s so little demand,” said Michael Rose, director of trading at Angus Jackson Inc. in Fort Lauderdale, Florida. “Some people are starting to question the economic recovery and that adds more pressure to gas”.....Red the complete article

Oil Retreats on Greater Than Anticipated U.S. Jobless Claims

Crude oil retreated after more Americans than anticipated filed claims for jobless benefits last week, spurring skepticism about the strength of the recovery from the country’s worst recession since the 1930s. Oil futures dropped more than $1 from the day’s highs after the Labor Department reported that applications for jobless benefits fell by 4,000 to 570,000 in the week ended Aug. 29, exceeding the 564,000 median forecast of economists surveyed by Bloomberg News. Crude advanced earlier as the Shanghai Composite Index climbed 4.8 percent, the most since March 4. “The oil market is taking its direction from what happens with equities,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.....Read the complete article

Crude Oil Technical Analysis From PCIFX

From guest analyst Jena Cartter of PCIFX....

Crude oil attempted to decline again, whereas the key support level,currently at 67.00, is protecting the upside trend till now. For today, we expect an incline on the intraday basis, confirmed by breaching the resistance level at 68.75; initially targeting 71.50. It is vital that trading remains above 67.00 to maintain the upside movements expected for today.

The trading range for today is among the key support at 65.00 and the key resistance at 73.15.

The general trend is to the upside as far as 47.20 remains intact with targets at 85.00.

Support: 67.70, 67.00, 66.50, 65.25, 64.65
Resistance: 67.75, 68.70, 69.70, 70.35, 71.50

Recommendation: Based on the charts and explanations above our opinion is buying oil from 68.75 To 71.50 and stop loss below 67.70, might be appropriate.

PCIFX New Horizon Of Perfection

Disclaimer: PCIfx assumes no responsibility or liability from gains or losses incurred by the information herein contained. There is a substantial risk of loss in trading futures and foreign exchange.

Crude Oil and Natural Gas Commodity ETF Explosion

Assessing whether more commodity funds will be forced to close, with John Hyland, United States Commodity Funds CIO and the Fast Money team.

Crude Oil Daily Technical Outlook

Crude oil's fall from 75.0 extends further and is now pressing near term trend line support. At this point, intraday bias remains on the downside. Sustained break of the trend line will affirm the case that whole rise from 58.32 has indeed ended at 75.0 already and turn focus to 65.23 support. Further break there will confirm and target 58.32 support next. On the upside, above 71.60 will flip intraday bias back to the upside for a test on 75.0 again and probably bring rally resumption to next long term Fibonacci resistance at 76.77 (38.2% retracement of 147.27 to 33.2). In the bigger picture, there is no change in the view that rise from 33.2 is a correction to whole down trend form 147.27.....Read the complete article

The Nasdaq Cut Open and Broken Down

Since we follow the NASDAQ as a market direction indicator and crude oil future demand concerns rely on the markets right now we thought it would be a good idea to examine the NASDAQ Index. This market, which made its peak in 2000 at the height of the dot com bubble, remains in a secular bear market.

After making a low in March of 2001, this market has had multi-year recovery which has rallied it very close to a 50% Fibonacci retracement level. After a nearly 50% recovery, this market now appears to be faltering.

The months of September and October are now with us and both of these months tend to be treacherous for the equity markets. We would not be surprised to see more of a two way trading market before it eventually falls on its own weight and resumes a downward path. This is what we expect to happen, however, we are going to rely on our Trade Triangle technology to give us the perfect timing for that event.

Click Here For Today’s Video and we will show you graphically what we expect to happen to the NASDAQ Index.

The Death of an Energy ETF....RIP DXO

It has been no secret that the CFTC is looking into many exchange traded notes and exchange traded funds that deal in the energy markets, along with other futures and other investment vehicles, to see how the role of speculators has played in the price swings in the commodity markets. Today came the announcement that one ETN is going to be killed (ergo redeemed) as a result. Deutsche Bank announced that it will redeem all outstanding units of its PowerShares DB Crude Oil Double Long Exchange Traded Notes (NYSE: DXO). The financial firm said that limitations imposed by the exchange on which Deutsche Bank manages the exposure of the notes have resulted in a “regulatory event” as defined in the terms of the notes… and this is causing Deutsche Bank to redeem the notes.....complete story

Oil Hovers Above $68 as US crude Inventories Drop

(AP:LONDON) Oil prices hovered above $68 a barrel Wednesday after a two day plunge as a drop in U.S. crude inventories suggested demand may be recovering. Benchmark crude for October delivery was up 60 cents to $68.29 a barrel by midday European time in electronic trading on the New York Mercantile Exchange. The contract Tuesday lost $1.91 to settle at $68.05. Oil sank almost $5 a barrel in the first two days of the week as investors worried that a global economic recovery this year would be slow and may not justify the big rallies in stocks and commodities since March.

U.S. stock indexes fell about 2 percent Tuesday.

Investors were cheered somewhat when the American Petroleum Institute said late Tuesday that U.S. inventories plunged 3.2 million barrels last week. Analysts had expected the API numbers to drop 1.9 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The Energy Department reports mandatory supply figures later on Wednesday, while refiners voluntarily report the API numbers. There were also signs Tuesday that the U.S. economy the biggest consumer of oil is improving.

The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index rose in August, indicating an expansion for the first time since January 2008. And the National Association of Realtors said pending U.S. home sales rose to the highest level in more than two years.

In other Nymex trading, gasoline for October delivery rose 1.81 cents to $1.80 a gallon and heating oil gained 2.41 cents to $1.78 a gallon. Natural gas jumped 3.6 cents to $2.86 per 1,000 cubic feet.

In London, Brent crude was up 67 cents at $68.40.

Bloomberg Technical Analysis: Oil Uptrend Intact Until a Drop Below $66

Crude oil, which fell from a 10 month high of $75 a barrel in New York last week, remains in an uptrend and a sustained move lower isn’t likely unless prices settle below $66, National Australia Bank Ltd. said. Oil may climb to its recent highs in coming weeks even as the volatility in prices reflected uncertainty among traders, according to Gordon Manning, a Sydney based technical analyst. He correctly predicted Aug. 5 that the market wouldn’t settle below $66 a barrel on its way to a new high for 2009. “It’s not a downtrend in my books,” Manning said in a phone interview today. “It certainly hasn’t pushed on with the sort of aggression that I thought it might do, but there’s not enough damage to really get too worried”.....Read the complete article

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