Oil Rises to Two Week High as Jobless Claims Drop, Dollar Falls

Crude oil rose to a two week high as the number of Americans filing jobless claims dropped and the dollar declined, bolstering the appeal of commodities as an inflation hedge. Oil climbed as much as 4.3 percent as Labor Department data showed that initial applications for unemployment benefits fell to the lowest level since January. Gold increased to a record for a third day and other raw material prices gained as the U.S. currency declined to a two week low against the euro.

“Crude oil is tracking the behavior of other markets,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “The jobs number was good. The recession is probably over and employment is a lagging indicator.” Crude oil for November delivery climbed $2.80, or 4 percent, to $72.37 a barrel at 12:38 p.m. on the New York Mercantile Exchange. Futures touched $72.55, the highest since Sept. 18. Oil has traded between.....read the entire article

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Crude Oil Daily Technical Outlook

Crude oil retreats sharply after rising to 7.197 and hit near term trend line resistance. With 4 hours MACD crossed below signal line, intraday outlook is turned neutral for the moment. Nevertheless, another rise is still mildly in favor with 68.16 support intact. Above 71.97 will bring rise resumption. Further break of 73.16 will indicate that fall from 75.0 has completed at 65.05 already. The corrective structure will in turn indicate that medium term rally is still in progress for another high above 75.0 before completion.

On the downside, below 68.16 will suggest that rebound from 65.05 has completed and will flip intraday bias back to the downside. Break of 65.05 will reaffirm the original bearish view that crude oil has topped out at 75.0 already and will bring fall resumption towards 58.32 key support next. In the bigger picture, the lack of follow through selling so far dampens the bearish view that crude oil's medium term rise from 33.2 has completed at 75.0.....read the entire article and charts!

Oil Rises as Dollar Declines, Crude Supplies Fall Unexpectedly

Oil rose in New York as the dollar weakened against the euro and a government report showed an unexpected drop in U.S. crude supplies, boosting optimism about a demand recovery in the biggest energy consuming nation. Oil pared yesterday’s 1.9 percent fall as the dollar declined toward a two-week low, increasing the appeal of commodities as an alternative investment. Prices were also supported by an Energy Department report that showed U.S. crude stockpiles fell 978,000 barrels last week amid a drop in imports. A 2 million barrel gain was forecast in a Bloomberg survey.

“The imports were down and that was a big surprise,” said Jonathan Koranfel, a director for Asia at options traders Hudson Capital Energy in Singapore. “Any more weakness in the dollar is limiting oil’s gains to a cap of about $72. The trading range in crude has gone from $65 to $75 to about $68 to $72. It’s just getting tighter and tighter.” Crude oil for November delivery gained as much as 83 cents, or 1.2 percent, to $70.40 a barrel in electronic trading on the New York Mercantile Exchange. It was at $70.18 at 12:55 p.m. Singapore time. Yesterday, the contract dropped $1.31 to settle at $69.57. Prices have gained 57 percent since the start of the year.....Read the entire article

Crude Oil Falls More Than $1 After U.S. Fuel Supplies Increase

Crude oil fell more than $1 a barrel after a U.S. Energy Department report showed that inventories of gasoline and distillate fuel increased. Gasoline supplies climbed 2.94 million barrels to 214.4 million last week, almost three times the gain forecast by analysts in a Bloomberg News survey. Stockpiles of distillates, which include heating oil and diesel, rose to the highest since January 1983. Oil also dropped as the rising dollar curbed the appeal of energy as an inflation hedge.

“This is a very bearish report,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “The product builds are significant and increase the cushion against any disruption. It takes uncertainty about refiners out of the equation.” Crude oil for November delivery fell $1.31, or 1.9 percent, to $69.57 a barrel at 2:59 p.m. on the New York Mercantile Exchange, the lowest settlement since Sept. 29. Prices have gained 56 percent this year.....read the entire article

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Crude Oil Falls After Report Shows Gain in U.S. Fuel Supplies

Crude oil fell for the first time in three days in New York after a U.S. Energy Department report showed that inventories of gasoline and distillate fuel, a category that includes heating oil and diesel, increased. Gasoline supplies rose 2.94 million barrels to 214.4 million last week, almost three times the gain forecast by analysts in a Bloomberg News survey. Distillate stockpiles climbed 679,000 barrels to 171.8 million, the highest since January 1983. Oil fell earlier as the rising dollar reduced the appeal of energy to investors looking for an inflation hedge.

“This is a very bearish report,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “The product builds are significant and increase the cushion against any disruption. It takes uncertainty about refiners out of the equation.” Crude oil for November delivery fell 61 cents, or 0.9 percent, to $70.27 a barrel at 11:46 a.m. on the New York Mercantile Exchange. Prices have climbed 58 percent this year. Futures have traded between $65.05 and $75 since Aug. 1. Oil traded at $71.42 before.....read the entire article.

Phil Flynn: It's so Funny How we Don't Talk Supply Anymore

It's so funny how we don't talk supply anymore.

It's so funny how we don't talk supply anymore. But I ain't losing sleep and I ain't counting sheep. Yet today we may be counting barrels. Yesterday it was about increasing interest rates in Australia and conspiracy theories against the dollar. Oh no!, they are plotting against the dollar! Run and hide! Run and hide in commodities. Today it may be back to good old supply and demand. The Energy Information Agency releases there weekly snapshot of supply and demand and now the market will focus on the old fashion fundamentals if only for a moment. And judging by Last night’s American Petroleum Institute’s version this report may raise a few eyebrows, especially when it comes to distillate supply

The API reported a stunning week over week supply drop in distillates of 2.9 million barrels. This was the main feature of the report and the main reason it will fall into the bullish category. Heating oil stocks fell by 892,000 barrels. The API also reported a small drop in crude oil supply to the tune of 254,000 barrels most of which came in Cushing, Oklahoma the Nymex delivery point. Gasoline stocks rose a modest 544,000 barrels. Despite the fact that supplies in every category are well above normal, if the EIA reports similar number this should feed into the bullish momentum that has engulfed.....Read the entire article.

Crude Oil Daily Technical Outlook

While intraday upside momentum in crude oil is not too convincing, further rise is still in favor with 68.16 minor support intact. Break of 73.16 will indicate that fall from 75.0 has completed at 65.05 already. The corrective structure will in turn indicate that medium term rally is still in progress for another high above 75.0 before completion. On the downside, below 68.16 will suggest that rebound from 65.05 has completed and will flip intraday bias back to the downside. Break of 65.05 will affirm the original bearish view that crude oil has topped out at 75.0 already and will bring fall resumption towards 58.32 key support next.

In the bigger picture, the lack of follow through selling so far dampens the bearish view that crude oil's medium term rise from 33.2 has completed at 75.0. Nevertheless, risk remains on the downside as long as 73.16 resistance holds. A break below 65.05 support will solidify the case the crude oil has topped out in medium term again. In such case, deeper fall should be seen to test on 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) first and break will target a retest of 33.2 low. However, a break of 75.0 will indicate that rise from 33.2 has resumed for 76.77/90.24 fibo resistance zone (38.2% and 50% retracement of 147.27 to 33.2) instead.....Here is the charts!

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Profits Taking Tempers Early Gains, as Traders Wait For Inventory Numbers

Crude oil closed higher on Tuesday renewing the rally off September's low. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. Profit taking tempered early session gains as traders took a wait a see approach to the market ahead of Wednesday's weekly stocks report. The mid range close sets the stage for a steady opening on Wednesday.

If November extends today's rally, September's high crossing at 73.58 is the next upside target. Closes below Monday's low crossing at 68.05 would temper the near term friendly outlook in the market.

First resistance is today's high crossing at 71.97
Second resistance is September's high crossing at 73.58

First support is Monday's low crossing at 68.05
Second support is September's low crossing at 65.05

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Natural gas closed lower due to profit taking on Tuesday as it consolidated some of Monday's gains. The low range close sets the stage for a steady to lower opening on Wednesday. Despite today's setback, stochastics and the RSI are turning neutral to bullish hinting that sideways to higher prices are possible near term.

If November extends the rally off September's low, August's high crossing at 5.133 is the next upside target. Closes below the 20 day moving average crossing at 4.585 are needed to confirm that a short term top has been posted.

First resistance is today's high crossing at 5.12
Second resistance the August's high crossing at 5.13

First support is the 20 day moving average crossing at 4.59
Second support is last Friday's low crossing at 4.35

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The U.S. Dollar closed lower on Tuesday and the low range close sets the stage for a steady to lower opening on Wednesday. The dollar pushed lower overnight after Australia pushed its interest rate one quarter percent higher, making it the first of the G 20 nations to do so. Downside momentum increased after a news report indicated that Gulf Arab states, China, Russia, Japan & France are secretly working on a plan to end dollar-based trading in the oil market. Oil would be traded on a basket of currencies that also includes gold.

The parties involved strongly deny the report, but speculation ran rampant, catching the fears and imagination of currency traders. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term.

If December renews September's decline, monthly support crossing at 75.73 is the next downside target. If December renews the rally off September's low, September's high crossing at 79.29 is the next upside target.

First resistance is last Tuesday's high crossing at 77.73
Second resistance is September's high crossing at 79.29

First support is today's low crossing at 76.28
Second resistance is September's low crossing at 76.05

Barclays Technical Analysis: Oil’s Trend Line Key to $75

Crude oil futures may surpass this year’s $75 a barrel high if prices for the most active contract close above their 100 day moving average and a six month trend line, according to technical analysis by Barclays Capital.

November crude oil on the New York Mercantile Exchange has settled above its 100 day rolling mean each day for the past week. While this signals potential for gains, for prices to rally the contract must also close over a line connecting the lowest points between February and July, Barclays said.

“A close above these indicators would point to a push towards the high end of the range that’s held since the middle of June,” Barclays analyst MacNeil Curry said in a telephone interview from New York“.....Read the entire article.

Crude Oil Daily Technical Outlook

Crude oil's consolidation was contained above 68.10 and rise from 65.05 resumed by breaking 69.93 resistance. FUrther upside should be seen in near term to 73.16 resistance first. As discussed before, break there will indicate that fall from 75.0 has completed at 65.05 already. The corrective structure will in turn indicate that medium term rally is still in progress for another high above 75.0 before completion. On the downside, below 68.10 will suggest that rebound from 65.05 has completed and will flip intraday bias back to the downside. Break of 65.05 will affirm the original bearish view that crude oil has topped out at 75.0 already and will bring fall resumption towards 58.32 key support next.

In the bigger picture, the lack of follow through selling so far dampens the bearish view that crude oil's medium term rise from 33.2 has completed at 75.0. Nevertheless, risk remains on the downside as long as 73.16 resistance holds. A break below 65.05 support will solidify the case the crude oil has topped out in medium term again. In such case, deeper fall should be seen to test on 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) first and break will target a retest of 33.2 low. However, a break of 75.0 will indicate that rise from 33.2 has resumed for 76.77/90.24 fibo resistance zone (38.2% and 50% retracement of 147.27 to 33.2) instead.....Here is the charts!

Macroeconomic Forces Rescue Oil Prices Once Again

Maybe the economy isn't so bad after all. Thank you sir may I have another? Oil prices knocked for a loop after last Friday's jobs number came struggling back as the rest of the commodity complex brought the petroleum markets back kicking and screaming. A rebound in the non manufacturing number from the Institute for Supply Management took away some of the sting from last week's dismal jobs report. Oil tried to ignore the ISM non manufacturing number that showed that the service sector grew in September for the first time in a year, yet with all of the outside macroeconomic forces and commodities screaming higher in just about every other sector, it was not to be.

The index rose 50.9 percent from 48.4 percent in August giving us hope that perhaps there may be some energy demand after all. Now, throw in some rumors about the dollar's dominance and we saw oil fail to break the rock solid support at $68 a barrel and propel itself back into its endless trading range. Oil is moving lower but not in real terms but in dollar terms as nations are rumored to replace the dollar as its means of trade.....Read the entire article!

Oil Rises a Second Day as Weak Dollar Boosts Investment Appeal

Crude oil rose for a second day in New York as the dollar’s decline bolstered the appeal of commodities as a hedge against inflation. Crude traded near $71 a barrel as the dollar weakened following a report that Arab states held talks on replacing the U.S. currency in oil trades. Saudi Arabia’s central bank Governor Muhammad al-Jasser denied the report. Prices climbed yesterday after data showed U.S. service industries returned to growth following 11 months of contraction.

“The weaker dollar is always supportive for all commodities,” said Tobias Merath, a commodity analyst at Credit Suisse Group in Singapore. “We could see another couple of dollars upside for oil from the dollar, but it won’t be decisive. We’d need some change in the fundamentals to break out of this $68-to-$74 range.” Crude oil for November delivery rose as much as $1.22, or 1.7 percent, to $71.63 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.47 a barrel at 1:20 p.m. London time.....Read the entire article

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Crude Oil Higher, Bulls Take The Advantage Overnight

Crude oil was higher overnight as it extends last week's rally. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If November extends last week's rally, the reaction high crossing at 73.58 is the next upside target. Closes below Monday's low crossing at 68.05 would temper the near term friendly outlook in the market.

Tuesday's pivot point, our line in the sand is 69.75

First resistance is the overnight high crossing at 71.63.
Second resistance is the reaction high crossing at 73.58.

First support is the 10 day moving average crossing at 68.05.
Second support is the reaction low crossing at 65.05.

Can you learn to trade crude oil in just 90 seconds?

Natural gas was higher overnight as it extends the rally off September's low. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near term.

If November extends the rally off September's low, August's high crossing at 5.133 then the 50% retracement level of this year's decline crossing at 5.320 are the next upside targets. Closes below last Friday's low crossing at 4.351 would confirm that a short term top has been posted.

Natural gas pivot point for Tuesday is 4.91

First resistance is the overnight high crossing at 5.08
Second resistance is August's high crossing at 5.13

First support is the 10 day moving average crossing at 4.84
Second support is the 20 day moving average crossing at 4.60

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The U.S. Dollar was lower overnight as it extends the decline off last week's high. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. If December extends the overnight decline, September's low crossing at 76.05 is the next downside target. Closes above last week's high crossing at 77.74 would confirm that a short term low has been posted.

First resistance is last Tuesday's high crossing at 77.74
Second resistance is September's high crossing at 79.29

First support is the overnight low crossing at 76.40
Second support is September's low crossing at 76.05

The Market Oracle: Betting on Commodities, Especially Crude Oil

In 2008, prices of oil, natural gas, gold, silver, copper, corn, wheat, and most other commodities reached multi-year, and in some cases multi-decade, highs. They’ve fallen sharply since then, but commodities aren’t going out of business. Another peak is coming, and it will be far higher, especially for oil. The price run up to 2008 came as a debt induced economic acceleration in the developed countries sucked in imports from the emerging economies of Asia. Virtually all the world was gobbling up commodities, but supplies were still choked by the preceding decades of underinvestment in mine development, processing plants, pipelines, railroads, and other elements of the industrial infrastructure needed for producing and transporting raw materials.

Faster consumption and static production capacity had an unsurprising effect prices rose. Then they rose some more and kept on rising. And in the later stages of the commodity price boom, investors, especially hedge funds, joined the bidding as a way to bet on a growing world economy. More bidders, more price push. But not forever. When the credit bubble that had been overstimulating just about every industry became unsustainable and financial markets everywhere collapsed, commodity prices collapsed along with them in anticipation.....read the entire article

Oil Trades Near $70 After Rising as Equities Gain, Dollar Falls

Crude oil traded little changed near $70 a barrel in New York after rising yesterday on optimism fuel demand will increase amid improved prospects for an economic recovery in the U.S., the biggest energy consumer.

Stocks climbed as a report from the Institute for Supply Management showed that U.S. service industries returned to growth after 11 months of contraction. Commodities also gained as the falling dollar bolstered the appeal of raw materials as a hedge against inflation.

“The major headline supporting the rally was the September ISM non manufacturing report showing positive growth,” said Mike Sander, an investment adviser at Sander Capital in Seattle. “Oil was pushed higher thanks to the 100 point move in the Dow Jones” Industrial Average, he said.....Read the entire article

Phil Flynn of PFG Best "Jobs Jab Oil Bulls"

Jobs losses are mounting and oil supplies are rising. It is time to face facts. Recent economic data is undermining the bull's oil case. Welcome to the jobless economic recovery that should reduce oil demand expectations even further as we look out into our future. Oil prices slid as our nation's unemployment reached a painful 9.8% and we lost 263,000 jobs. The oil bulls had better hope the dollar collapses if they are going to have any luck defending these lofty price levels. US supplies are staggering but even more so when you consider the weakened state of the jobs market. With the US being a consumer based economy, it does not bode well for a quick return to robust growth.....Read the entire article

Open Interest Surge Signals Peak as Traders See Slump

Investors are snapping up commodities at the fastest pace in 18 months just as stockpiles of raw materials rise and shipping rates plunge, signaling that prices may be poised to fall. Open interest, or contracts yet to be closed, liquidated or delivered, rose 6.6 percent in the third quarter for the 20 most traded U.S. commodities, exchange data compiled by Bloomberg show. That’s the steepest gain since the first three months of 2008, just before the credit market freeze sent prices plunging from records.

While the U.S. economy shows signs of bottoming after the deepest financial crisis since the Great Depression, supplies of raw materials are growing faster than demand. Oil inventories rose 15 percent in the past year, Energy Department figures show. The Baltic Dry Index, a barometer for raw material demand, slid 41 percent in the third quarter. Alcoa Inc., the largest U.S. aluminum company, will report an adjusted loss of 83 cents a share this year, based on the average estimate of analysts. “We’ve been moving out of our commodity holdings and into cash,” said Peter Sorrentino, who.....Read the entire article