Market Report: Oil Prices Set to Decline Amid Global Econ Matters

As the dollar world turns. Oil prices are heading lower ahead of a big week in global economic matters. Not only will the G-20 meet in Pittsburgh to try to assess what went wrong with the global economy and try to fix it, but also the Fed meets to decide whether or not it's time to remove some of the props that have been lifting the global markets. And the question for oil traders is whether or not the dollar can find love and happiness in a world gone mad.

Once again the dollar is the key driver moving the crude market. Traders are covering the dollar on fear that perhaps the G-20 may do something to support the dollar or that the Fed may slow down its purchases of treasuries. Of course the dollar has been oversold and it's possible that we are getting to the point where the carry trade has gotten.....Read the entire article

New Video: Two Major Technical Forces Are About to Collide in the S&P 500

The S&P 500 has seen remarkable recovery from the lows that were seen earlier this year. However, all of that may come to an end as we fast approach a strategic level for this market. There are two major technical indicators that are colliding at a crucial point and time. Unless you’re aware of these indicators, it could be very expensive.

In today’s short video, I explain both the technical indicators we are discussing and also the important time frame that we are just about to enter.

I think you will find today’s video not only interesting, but also educational.

There is no need to register for this video and of course you can watch it with my compliments. I highly recommend watching this video today, otherwise you risk missing out on what could be the move of the year.

Just Click Here to enjoy the video and please feel free to leave a comment and let our readers know what you think!

Bloomberg Technical Analysis: N.Y. Natural Gas Set to Decline Below $3

Natural gas futures, which jumped 28 percent last week, may revisit seven year lows after surging into an “overbought” area of resistance between $3.58 and $3.87 per million British thermal units, according to a technical analysis by Barclays Capital. Gas tumbled 82 percent from a high of $13.694 per million Btu in July 2008 to touch $2.409 on Sept. 4. Gas then surged 57 percent through Sept. 18. The futures have entered a resistance zone and the downtrend is likely to resume, MacNeil Curry, a New York based analyst at Barclays, said in an interview. “We’re around the high end of this resistance zone and things are overbought,” Curry said. “This is still an environment where bounces should be sold.....Read the entire article

What are you waiting for, Get 10 Trading Lessons FREE

Weekly Summary From Crude Oil Trading Small Spec.

From Guest analyst Rich Olney.....

Weekly Summary for Sunday 9/20/09
Nov Crude Oil finished the week up 4% or 2.77 points to close at 72.49. Nat Gas finished the week up 21.6% closing at 3.778. The SnP cash closed the week up 2.5% closing at 1068.30. The USD lingers around support at 76 closing the week at 76.67. Gold finished the week up 4 points or up 1/2% at 1009.40. This week we get the FED MTG on Wed.

The commercials increased their net short position on crude this last week. It increased from -133,519 to -143,033 which is the second highest net short position this year. The high is 145,499 this year so we are at a yearly extreme. The Nat Gas net long position is at 40,512 which is the highest it has been since the commercials went net long last May.

For inventories crude oil imports have been decreasing and inputs into refineries have been increasing which means lower crude oil inventories. However Gasoline and Heating oil inventories are increasing. For Nat Gas current inventories are at 3458 and there are about 7 -10 more injections left before nat gas winter demand ramps up. If Nat Gas injections were to match last year then that would mean an additional 524 bcf of injections. Here are the balance of last years injections:

9/18 +54 bcf
9/25 +82 bcf
10/2 +87 bcf
10/9 +81 bcf
10/16 +71 bcf
10/23 +49 bcf
10/30 +23 bcf
11/6 +54 bcf
11/13 +23 bcf
11/20 -55 bcf

For technicals on crude support lies at 68. There is resistance at 73 which has held back crude for two weeks. If crude closes above 73 then it can make a run at the highs at 75.89 where there is strong resistance. For Natty it needs to close above the down trend line and above the rally high at 3.90. If natty can close above 3.90 two session in a row then that should confirm higher prices are in the cards. However Natty to close above the trend line first.....Read the entire post with charts!

Just Click Here to sign up for a Crude Oil Trading Small Specs Membership

“As California goes, so goes the nation”....Let’s hope not!

From guest blogger Adam Hewison....

There’s a saying that most of us have heard many times before, “As California goes, so goes the nation.” The saying is/was intended to recognize Californians for consistently being on the cutting edge of new developments in science, business and innovation.

Let’s hope that the current dire unemployment picture in California doesn’t end up sweeping the rest of the nation.

—————-

This graphic courtesy of the Los Angeles Times, Full article here.

Crude's Rally Derailed from Fundamentals Again

Strength in stock markets and decline in USD were the major reasons for the rises in commodities. In the US, Dow Jones Industrial Average climbed +2.2% to settle at 9820 while S&P 500 Index surged +2.6% to 1068.3 as driven by better-than-expected housing market (housing starts), employment situation (jobless claims) and improvements in manufacturing activities (Empire State and Philly Fed Index). The dollar weakened further with every rebound being treated an opportunity to sell as investors' risk appetite increases. In the coming week, the FOMC meeting will be market's focus. While the Fed will likely announce to keep its policy rate at 0-0.25% for an extended period of time, it may talk more about plans for exiting from the current stimulus policies.

Crude Oil
Crude oil price retreated to -0.6% to settle 72.04 Friday, the second consecutive day of fall as USD recovered after substantially weakened against major currencies in the past week. On weekly basis, the October contract reached 73.16 the highest and gained +4%. Recent rally in crude oil has been determined by movements in USD and stock markets, rather than fundamentals....Read the entire article

What are you waiting for....Here is 10 FREE Trading Lessons!

What are you waiting for....Here is 10 FREE Trading Lessons!

What a great way to start the weekend, we are giving you 10 FREE trading lessons from the MarketClub.

MarketClub Trade School is your own personal trading university where you set the curriculum with some of the most well known professional traders in the world.

MarketClub puts all of your research tools in one easy to use package that together gives you the edge you need to build and manage your investments.

So just Click Here to get started with your 10 FREE lessons and be ready to put them to work right away!

Crude Oil Fluctuates Amid Equity Gain, Ample U.S. Supplies

Crude oil fluctuated as equity gains indicated that the U.S. is pulling out of a recession amid ample fuel supplies in the world’s biggest energy using country. Oil is heading for a 4.6 percent increase this week, a second straight weekly advance, as the stock market climbed on data showing an expansion in U.S. housing starts and industrial capacity utilization.

The country’s supplies of crude oil, gasoline and distillate fuel are higher than average, according to the Energy Department. “This is a range bound market,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “There’s nothing at this moment that is giving it a direction”.....Read the entire article

Crude Oil Declines for a Second Day on Stronger U.S. Dollar

Crude oil fell for a second day as the dollar strengthened against the euro, dimming investors’ demand for dollar priced assets to hedge against inflation. Oil dropped as much as 1.7 percent as the U.S. currency climbed for the first time in five days. Inventories of crude oil, gasoline and distillate fuel are higher than average, according to the Energy Department.

“The rally in energy is looking a little long in the tooth,” said John Kilduff, senior vice president of energy at MF Global in New York. “There isn’t any economic data to give the market any strength. The dollar is a bit stronger today, which is weighing on things”.....Read the entire story

The Buy and Hold Myth.....Is Buy and Hold Back?

We have been thinking about one of the oldest myths about trading, "the buy and hold myth". Everyone has heard the buy and hold logic....but how about the other side of the argument? While this strategy has worked in certain markets at certain times, we do not believe we are in a time frame where this strategy is going to meet with a lot of success.

The world around us is changing rapidly and therefore it is important to have strategies that can change with this new regime.

In today’s video we are going to show you how the buy and hold strategy is flawed when you compare it to our “Trade Triangle” technology. I think you will be surprised at the results and how well you can do using this simple approach to markets.

There is no need to register for this video and of course you can watch it with our compliments. I highly recommend watching this video today, otherwise you risk missing out on what could be the move of the year.

Just Click Here to enjoy the video and please leave a comment to tell us what you think of the video and the buy and hold myth.

UNG - Still in a Downtrend, or Has the Tide Turned?

With all of the controversy UNG has been through this summer, more then ever we have to rely on technical analysis and trend indicators. We rely solely on Smart Scan Chart Analysis for the current trend and Smart Scan is still showing some near term weakness in UNG. However, UNG is now in a longer term uptrend and should be traded with tight money management stops.

Based on a pre-defined weighted trend formula for chart analysis, UNG scored +70 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

+10......Last Hour Close Above 5 Hour Moving Average
+15......New 3 Day High on Wednesday
+20......Last Price Above 20 Day Moving Average
+25......New 3 Week High, Week Ending September 19th
-30......New 3 Month Low in September
+70......Total Score



To get these Smart Scan Analysis in your email inbox daily just Click Here to Create a FREE Stock Portfolio.

New Video: How to Invest in Energy

Dan Dicker expert trader reveals the best oil stocks to own and how to diversify your energy portfolio.

Crude Consolidates Just Below our Previous 3rd Tier Downtrend Line

Crude futures are hanging just below our previous 3rd tier downtrend line after posting a solid recovery from our 1st tier uptrend line. Crude futures picked themselves up after Friday's sell off on large volume following broad based depreciation of the Dollar coupled with the S&P breaking through 1050. Investors returned to risk in the aftermath of better than expected global economic data. The most positive catalyst for crude futures was the impressive showing in Core Retail Sales on Tuesday. Improvement in consumption helps raise the outlook for present and future demand for commodities such as crude. As for the supply side, the U.S. reported another large inventory shortage for the third time in the past four weeks. The dramatic drop in supply combined.....Read the entire article

How To Find Winning Trades In Any Market

Is There Something Wrong with the Crude Oil Market?

With the official end to summer, the Labor Day weekend, behind us and the nation's largest energy company investor conference underway, the oil market received several shot in the arm positives last week. Wall Street talking heads had a difficult time understanding what was going on with the price of gold and crude oil futures soaring on the first trading day following last Monday's holiday. Gold futures traded over $1,000 an ounce and crude oil prices jumped by $3 a barrel. The inability of the talking heads to explain the phenomenon left us wondering if we were seeing a global investor reaction to Washington politicians returning to work. Those of us living in Texas have a reaction when our legislature goes into session in Austin. We hold onto our wallets during those few months of the legislative session every two years since that is our peak exposure to politicians inflicting serious financial damage on our wellbeing.....Read the entire article

Gas Fund’s Roll ‘Slaughtered’ Speculators, Boosted Volatility

Speculators trying to profit from the U.S. Natural Gas Fund’s roll of futures contracts got “slaughtered” and helped boost volatility as gas prices surged this week, said Adam Felesky, chief executive officer of BetaPro Management Inc.

Gas for October delivery rose 27 percent, through yesterday, on the New York Mercantile Exchange as traders had to cover their bets that the gas fund’s sale of the front month contract would reduce the price, said Felesky. Volatility jumped to the highest level since Amaranth Advisors LLC collapsed in September 2006.

Speculators shorted October gas, anticipating that the $4 billion gas fund would push prices down when it began selling its October contracts on Sept. 14, said Felesky, whose C$1 billion ($937.1 million) Horizons BetaPro Nymex Natural Gas Bull Plus ETF rolled around the same time as the larger fund.....Read the entire story

Oil Price Remains Firm As Strong Stock Market Offers Support

Strong trading momentum in crude oil persists and the benchmark contract rises further to 72.7 in European morning. Investors remain thrilled by the huge draw in crude inventory despite weak fuel demand. Advance in equity markets and weakness in USD also support prices. Stock markets in Europe open higher Thursday. UK's FTSE 100 Index climbs +1% tpo 5172 although the country's retail sales stayed flat in August from a month ago. The market had expected a +0.1% gain. On annual basis, the gauge rose +2.1% while July's sales were revised down to +2.9%. Both of DAX (Germany) and CAC 40 (France) gain +0.6% in morning session.

Stocks in Asia performed very well with the MSCI Asia Pacific Index rising +1.2%, In Japan, the Nikkei 225 Stock Average surged +1.7% to 10444 as the Bank of Japan upgraded its economic outlook on the nation. The BOJ stated that Japan' economy has shown 'signs of recovery', compared with the 'stopped worsening' comment made in the previous month. However, the central bank remained concerned about the downside risk to growth and hence maintained the policy rate at 0.1%.....Read the entire article with charts!

Oil Trades Near $72 After Supplies Drop to Lowest Since January

Oil traded near $72 a barrel in New York after the U.S. Energy Department reported that crude stockpiles in the biggest energy consuming nation dropped to the lowest level since January. Crude inventories fell 4.73 million barrels, the weekly report showed yesterday, more than the 2.5 million barrel decline forecast in a Bloomberg News analyst survey.

Prices also gained as the dollar declined to the weakest level in almost a year and as global equities advanced, spurring expectations of improving fuel demand.“The gains in equities support optimism for the economic recovery that would drive oil demand and lead to supply tightness,” said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore.....Read the entire article

New Video: Crude Oil Rises After EIA Report

New Video: USD$ Dollar Index UPDATE

The last time we made a video of this index was a little over two months ago. In that video our Trade Triangle technology predicted that we would see further weakness in the Dollar Index.

Guess what? This market has weakened substantially since our last video on July 14. We also pointed this out in a blog post on September 3rd.

Our Trade Triangle technology has really been on top of this market and captured every major move since inception. MarketClub’s “Trade Triangles” remain steadfastly bearish and there appears to be no lasting turnaround in the Dollar Index as of this writing.

In this short video, we want to show you exactly how the Trade Triangles can benefit your own trading. The process is very simple, very direct, and yes, very profitable. Nothing is guaranteed in trading, but you will certainly put the odds in your corner using our Trade Triangle technology.

Just Click Here to watch the video!

There is no need to register for this video and of course you can watch it with our compliments. I highly recommend watching this video today otherwise you risk missing out on what could be the move of the year.

Please feel free to leave a comment and let us know what you think.

Is Resolution of Natural Gas Conundrum About to Emerge?

For most of this year, natural gas prices have moved counter to almost everyone's expectations falling while crude oil prices have risen dramatically. The conventional explanation has been that natural gas production coming from the newly completed wells in the prolific gas shale formations around the country is much greater than from traditionally located and drilled wells. The unanswered questions are when will this phenomenon of more productive wells coming on stream end and why are producers continuing to drill ANY gas wells in a sub $3 per thousand cubic feet (Mcf) world?

Why are producers continuing to drill ANY gas wells in a sub-$3 per thousand cubic feet (Mcf) world?

Some producers have claimed that they have been scaling back their gas drilling activity lately, despite the recent uptick in gas drilling rigs, but the backlog of drilled but yet to be completed wells is being worked down and that accounts for many of the prolific new wells coming on stream. The answer to why producers are willing to drill and complete wells in today's low gas price world is answered by the strong contango that has prices for natural gas one year into the future selling at nearly $2 per Mcf higher than current fiscal spot prices. The two charts below.....Read the entire article with charts!

Technical Analysis for Energy Markets

The key support level for the ascending channel remained intact in front of the crude oil's constant attempts to decline, to push the price to the upside and halt at correction level 67.8% for the last downside wave, seen in the image above. It appears that a constant slant is towards the upside; thus, continuing the general upside within the main ascending channel (shown in the secondary image), while taking into consideration that achieving this upside requires some key terms; first one being the breach of level 71.15 (correction 67.8%), the second is breaching the minor resistance level 72.40 (resisting the minor descending channel, which could force the price in declining once again), and the third being the most.....Read the entire article with charts

Bloomberg Analysis: Crude Oil Risks a Pullback to $59 if $66 Support Fails

Crude oil, struggling to sustain gains above $70 a barrel this month, faces a decline to $59 if support on technical charts fails in the coming days, National Australia Bank Ltd. said. Oil is likely to continue drifting in a sideways pattern as traders seek to gauge the market’s short term depth, according to Gordon Manning, a Sydney based technical analyst. Your keywordFutures, which touched a 10 month high of $75 a barrel Aug. 25, haven’t traded at $59 since mid July.

“It’s trying to find a bit of a base,” Manning said in a telephone interview. “A close below $66 would easily take it lower.” Crude oil yesterday rallied 3 percent, the most in a week, after Federal Reserve Chairman Ben S. Bernanke said the recession has probably ended, fanning expectations global demand would rebound. The contract for October delivery on the New York Mercantile Exchange traded at $70.28 a barrel, down 65 cents.....Read the entire article

Natural Gas Extends Gain From Seven Year Low as Economy Lifts

Natural gas advanced, extending its gain to 38 percent from a seven year low earlier this month, on speculation that a rebound in demand will reduce a surplus of the power plant and industrial fuel. Manufacturing in the New York region grew in September at the fastest pace in almost two years and U.S. retail sales jumped in August by the most in three years, economic reports today showed. Gas tumbled to $2.409 per million Btu on Sept. 4, the lowest price since March 2002, on a glut of the fuel.

“The market is starting to count in an economic recovery, which should bring with it an increase in demand,” said Peter Beutel, president of Cameron Hanover Inc., an energy consultant in New Canaan, Connecticut. Natural gas for October delivery rose 2.3 cents, or 0.7 percent, to settle at $3.32 per million British thermal units at 2:51 p.m. on the New York Mercantile Exchange after rising as high as $3.60. Prices are down 41 percent this year.....Read the entire article

Crude Consolidates Just Below $70 Barrel

Crude futures are returning earlier gains after failing to break through the psychological $70/bbl level following much better than expected Retail Sales data. The optimistic Retail Sales data is an encouraging development for battered U.S. consumption. A recovery in Retail Sales implies an improvement in broad based consumption, lifting the price of crude. However, the positive impact from the out performance of U.S. data is being countered by a collapse in the GBP/USD. BoE Governor King delivered another monetary shock today (refer to GBP/USD analysis), sending the Pound sharply lower against all of its major crosses. The negative performance of the GBP/USD is dragging on crude since it is a dollar denominated commodity. On the other hand, it is encouraging to see the EUR/USD and gold holding steady despite the.....Read the entire article

What Glut? Oops, Maybe There Is A Glut After All

For weeks the talk in the investment world and the energy business was what would happen when the glut of natural gas rendered winter storage no longer an option. The debate focused on what would happen to the surge in natural gas production if we completely filled the nation’s available storage capacity before the start of the heating season. How would producers handle involuntary well shut ins? What would happen to the price of natural gas would it be like some periods in recent memory in which Rocky Mountain gas sold for pennies?

How would producers handle involuntary well shut-ins?

But then an amazing thing happened. The Energy Information Administration’s (EIA) weekly gas storage report for the week ending September 4th came out showing that producers had injected only 69 billion cubic feet (Bcf). The gas futures market took off. Gas injection volumes for the week were below the average expected by analysts and traders on Wall Street.....Read the entire story

Crude Oil Rises for First Time in Three Days as Dollar Weakens

Crude oil rose for the first time in three days as the dollar traded near its lowest level against the euro in a year, spurring demand for crude as an inflation hedge. The U.S. Energy Department will probably say tomorrow that supplies of distillate fuel, which includes diesel and heating oil, rose for a fourth week from their highest level since 1983, according to a Bloomberg News survey. U.S. crude oil inventories are likely to have fallen last week as refineries bought fewer cargoes before idling plants for upgrades and repairs. “The U.S. currency continues to set the trend for oil in the absence of any major fundamental developments,” said Andrey Kryuchenkov, a VTB Capital analyst in London. “We’ll probably see more sideways trading ahead of the inventory numbers”.....Read the entire article

Crude Oil Daily Technical Outlook

Crude oil's corrective rebound from 67.05 should have completed at 72.9 already. Intraday bias remains mildly on the downside for 67.05 support first. Break will confirm that whole decline from 75.0 has resumed and should target 100% projection of 75 to 67.05 from 72.9 at 64.95 next. On the upside, above 69.81 will turn intraday outlook neutral again and bring recovery. Nevertheless, break of 72.90 is needed to indicate resumption of rise from 67.05 Otherwise, risk will remain mildly on the downside. 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. Question remains on whether such rally has completed at 75.0 already. Crude oil is now at important medium term trend line support. Sustained trading below will be the first alert that such rise has finished. Break of 58.32 will confirm this case and turn outlook bearish for 33.2 low next.....Read the entire analysis and charts!

Oil Falls for 2nd Day as Refiners Idle Units, Fuel Supply Gains

Crude oil fell for a second day as refineries idle units for maintenance and on speculation that U.S. fuel stockpiles will climb as consumption declines.

U.S. refiners perform repairs and upgrades in September and October as gasoline demand falls and before heating oil use rises. U.S. supplies of distillate fuel, a category that includes heating oil and diesel, climbed to their highest level since 1983, an Energy Department report showed last week.

“The fundamentals for oil are bearish,” said Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania. “The driving season is over, heating oil demand has yet to pick up and refineries are going into turnarounds, which means a lot of demand for crude oil will be offline. If there is a correction, it’s going to happen now”.....Read the entire article

Petrobras to Hire Up to 28 New Rigs for Ultra-Deepwater Exploration

Petrobras' Executive Board has approved the strategy to hire up to 28 new drilling rigs to be built in Brazil, with increasing national content, and to be used for ultra deepwater exploration, including the fields located in the pre-salt layer. The rigs are slated to be delivered between 2013 and 2018. A first phase foresees the hiring of a minimum lot of 9 rigs. Of this first lot, seven vessel type units will be built, based on consolidated technologies widely used in the global market, and constructed in a single shipyard. Contracting these seven rigs from a same shipyard will allow the winning bidder to make the investments that are required in order for it to construct the needed infrastructure and to achieve the necessary economies of scale. The two other units, which may be either vessel.....Read the entire story

Oil Falls for Second Day on Doubts Over Pace of Demand Recovery

Crude oil fell for a second day as higher U.S. fuel stockpiles raised concern gains in prices may have outpaced the recovery in the global economy. Oil slipped to its lowest in nearly a week before a report tomorrow in the U.S., the world’s largest energy consumer, which may show retail spending barely changed in August if gasoline and autos were excluded. The country’s stockpiles of distillate have climbed to their highest levels since 1983, according to Energy Department data last week. “Crude oil is just following weak fundamentals,” said Ken Hasegawa, a commodity derivative sales manager at broker Newedge in Tokyo. “If the price goes down below $68, then it’s possible to go down to $66”.....Read the entire story

Consolidation in Crude Oil will Continue in Coming Months

Commodity prices rose modestly last week amid weakness in USD. Reuters/Jefferies CRB Index added +1.4% while USD Index plunged almost -2% to 76.6, the lowest close in a year. Commodities normally trade in opposite direction with the dollar. The generation low interest rate in the US (Fed funds rate: 0-0.25%) has caused massive selloff in USD. Against the euro, the greenback plunged for 4 out of 5 trading days and closed -1.9% lower at 1.457, the lowest level in 9 months, for the week. Against the pound, USD also slid -1.6% to 1.6655, a 1-month low, last week. There were 3 central bank meetings last week. All of the RBNZ, BOE and BOC left interest rates unchanged at 2.5%, 0.5% and 0.25% respectively during the meetings but policymakers indicated brighter economic outlooks for 2H09 and 2010. In the coming week, the BOJ and SNB will decide on rates. We believe both banks will leave policy rates unchanged at 0.1% and 0.25% respectively.
Crude Oil
After spiking to 72.9, crude oil tumbled to as low as 68.8. The October contract plunged -3.9% to settle at 69.12 Friday, leaving this week's gain to +1.2% only. The black gold's decline Friday was accompanied by the dollar's weakness and strong US economic data. These were in contrary to the usual inverse relationship between commodities and USD.....Read the entire article

Natural Gas Fund to Offer Limited Sale of New Shares

U.S. Natural Gas Fund, the world’s largest exchange traded fund in the fuel, will begin selling new shares under “limited circumstances” beginning Sept. 28, the fund said today in a regulatory filing. The fund, which ran out of new shares on July 7, may condition the creation and sale of new shares on a purchaser’s ability to sell to the fund investments that track the price of natural gas, including over the counter swaps, the fund said in its filing to the Securities and Exchange Commission. The Commodity Futures Trading Commission has moved to curb energy speculation and imposed limits on natural gas trading. That has forced the fund to halt new share creation while it looks for alternative natural gas investments, it said in an Aug. 12 filing with the SEC.....Read the entire article

Analyst Phil Flynn on Gold and the Oil Markets

While the media focuses on OPEC, one analyst says the price of oil is really driven by gold. Phil Flynn of PFG Best Research joins the Energy Report from the Chicago Board of Trade.

Oil Can't Sustain This Week's Rally, Natural Gas Falls Again

After rallying for four days, the price of oil fell more than $2 in trading on the New York Mercantile Exchange Friday. While initially, the price of oil made gains to threaten $73, crude oil eventually fell below $70 a barrel. The price of crude oil fell $2.55 on the NYMEX Friday to settle at $69.29 a barrel and erase the gains made during the week's rally. "Oil was rallying, once again, for reasons other than supply and demand," said Phil Flynn, vice president in charge of research for PFG Best in Chicago. "Earlier in the week, you had all this market momentum: The stock market was rallying every day; the dollar was getting slammed; and oil was rallying really reluctantly all week." The price of oil has been propped up beyond what the underlying fundamentals can support by positive economic data that points to an end to the global recession and an increase in energy demand.....Read the entire article

Trade Triangle Buy Signal Issued For Gold

Gold is hot! And our Market Club "Trade Triangle" Technology has issued another buy signal for Gold. Just click here for a free online tour of Market Club....and a risk FREE 30 day test drive.

Mexico's Fading Oil Output Squeezes Exports, Spending

Mexico's oil output is falling faster than expected, increasing the chance that the country will lose its status as a major oil exporter in coming years and face a worsening budget shortfall. Output at state owned oil monopoly Petroleos Mexicanos's offshore field Cantarell, once the world's second largest oil field, has plunged to 500,000 barrels a day from its peak of 2.1 million in 2005. "I don't recall seeing anything in the industry as dramatic as Cantarell," says Mark Thurber, assistant director for research at the Program on Energy and Sustainable Development at Stanford University.....Read the entire article

Total CEO Says Oil Prices Could Hit $145 by 2014

Total's Chief Executive Christophe de Margerie foresees the price per barrel of crude oil surpassing $145 in the near future, reports Dow Jones Newswires. In an interview with Le Parisien published Friday, the head of the French oil major said, "We risk to face a new oil crisis at a time when demand will surpass supply in 2014/15."

"It is urgent that we invest," Margerie added. Margerie revealed that Total has bank accounts in "tax havens," and should a decision be made at an international level, the company would be prepared to withdraw the money, Dow Jones reported.

From the staff at Rigzone

Crude Oil Is Set for Weekly Gain on Dollar, China’s Demand

Crude oil rose for a fifth day as the dollar fell toward a nine month low and industrial production in China, the world’s second biggest energy user, grew at a faster pace than forecast. Oil is poised for its first weekly gain in three after the dollar reached its lowest level since Dec. 18 against the euro for a second day as China’s factory output gained and new loans exceeded analyst expectations, reducing demand for the U.S. currency as a refuge. A weaker dollar increases demand for commodities as a hedge against inflation. “The expectation is that China is on a strong growth path,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “Also supportive of oil prices was the fact that the U.S. dollar has remained fairly soft.” Crude oil for October delivery rose as much as 41 cents, or 0.6 percent, to $72.35 a barrel on the New York Mercantile Exchange. It was at $72.26 a barrel at 11:43 a.m. Singapore time. Prices have gained 6.3 percent this week and climbed 62 percent this year.....Read the entire article

Conoco Says Australia Could Be Biggest LNG Exporter

Australia could become the world's biggest exporter of liquefied natural gas, or LNG, by 2020, the head of ConocoPhillips' (COP) Australian unit said Thursday. The comments came as Chevron Corp. (CVX) said it has signed three binding sales agreements to supply nearly three million tons a year of LNG from the proposed Gorgon project in Western Australia state to Japanese and Korean energy companies. ConocoPhillips Australia President Joseph Marushack said that a final investment decision is still expected to be made for its massive Gladstone LNG joint venture in Queensland state with Origin Energy Ltd. (ORG.AU) by the end of 2010, with first gas to be shipped in 2014.....Read the entire article

Crude Remains Supported as IEA Raised Demand Forecasts

Crude oil price remains strong in European morning. The International Energy Agency (IEA) raised its forecast on oil demand, as indicated in the September report. The October contract hovers around 72 as investors await further details on US inventories. As driven by stronger than expected US demand and rapid growth in China, the IEA revised up its demand forecasts for 2009 and 2010, to 84.4M bpd and 85.7 M bpd respectively. There were compared with June's projections of 83.94 M bpd for 2009 and 85.25M bpd for 2010. According to the agency, 'there is growing evidence that the global economy may be finally stabilizing, with industrial destocking coming to an end, coupled with the effects of large scale government intervention... Oil demand in US, China and other Asia appears to be running stronger than preliminary estimates suggested'.....Read the entire article

OPEC Maintains Oil Quotas as IEA Raises Global Demand Forecast

OPEC said it will keep oil production quotas unchanged, banking on a recovery in the world economy to maintain prices near today’s $72 a barrel as the International Energy Agency raised its global demand forecast. The Organization of Petroleum Exporting Countries agreed to maintain total production quotas at 24.845 million barrels a day and will urge members to adhere to targets, OPEC Secretary General Abdalla El-Badri said. The IEA raised its global oil demand estimate for next year for a second month, citing growth in Chinese consumption and stronger-than-expected U.S. oil use. “Holding production was the prudent thing to do,” Jason Schenker, president of Texas-based consultants Prestige Economics LLC, said in an.....Read the entire article

How to Trade Gold, Natural Gas & Crude Oil ETF Funds

From guest analyst Chris Vermeulen at The Gold and Oil Guy

How to trade hot commodities like natural gas, oil and gold – We should see big moves in the coming weeks as gas bottoms, and oil & gold breakout or breakdown. A lot of money is going to be exchanging hands quickly and the key is to be on the receiving end of things. Below are some charts showing where these commodities are trading.

How to Trade Gold – Weekly Chart
How I trade gold is relatively straight forward. I use a simple trading model which allows me to identify the down side risk for a potential gold trade. I also use the same model for trading oil, gas and silver.

Beyond finding good entry points, it is crucial to know when to take some profits off the table. The weekly gold chart clearly shows gold trading at a resistance level which means there are going to be more sellers than buyers, hence the reason it is called resistance.

To trade gold I enter with my low risk entry points and sell half my position once I reach a resistance level. Today for example gold moved up into this long term resistance level and then started to head south. We took some profits off the table before gold dipped in the late afternoon for a healthy gain. Taking profits is a must or you’ll simply hold onto winning positions until they eventually turn into a loser.


How to Trade Crude Oil – Weekly Chart
Trading crude oil is exciting because it moves much faster than gold. How to trade crude oil with low risk can be done by using my simple trading model which is a combination of indicators like momentum, support & resistance, volume, price patterns and media coverage. All these things combined allow for highly accurate trades with minimal down side risk.

Crude oil looks ready to make a big move. The odds are pointing to higher prices because oil has a multi month bullish price action and the falling US dollar helps increase the price of oil. I can see oil breakout and rally into the $95 per barrel level if things go that way in the coming weeks.


How to Trade Oil (USO Fund) – Weekly Chart
USO tracks similarly to the price of crude oil and it provides some great trades for both swing traders and day traders. I focus on trades that bounce off support with low downside risks, which occur on both the daily and weekly charts.


How to Trade Natural Gas – Weekly Chart
Natural gas is looking ready to bottom here. If you go back to the early 90’s the $2-3 range is a major support level. While I don’t generally try to pick bottoms, there are some signature price patterns and volume patterns that have proven to be very profitable for catching sharp bounces.


How to Trade Natural Gas – Daily Chart
The daily chart shows a perfect waterfall sell off with the price of natural gas dropping to a long term support level. This pattern combination shows panic selling which indicates a short term bottom is close.

The extreme panic selling and sharp decline in price, removes much of the down side risk. Scaling into a position over a few days, if the price continues to move lower, is important for this strategy to work its magic.

The black horizontal lines show my resistance levels for taking profits. If the price were to drop below $10 then I would exit the second half of the position to lock in the rest of the profit.


How to Trade Commodities Conclusion:
Trading commodities is very simple with all the ETF’s and funds available. The energy funds like oil and gas have some issues with following the prices of their underlying commodity but I do not find it a problem with my style of trading.

I would really like to know the entire story about what is going on with the oil and nat gas funds which have crazy contango issues??? Why do other commodity funds like GLD (gold bullion) and SLV (silver bullion) not have these issues?? Why can’t they make a fund which follows oil and gas properly? All I know is that there are a lot of dishonest people in the financial industry taking honest hard working peoples money.

If you would like to receive Chris Vermeulen's free weekly trading reports visit The Gold and Oil Guy to join his newsletter.

Stimulus Money To Fund Propane Fueling Stations

The U.S. Department of Energy on Wednesday awarded $12.9 million in two stimulus grants to CleanFUEL USA, a leader in propane engine technology and alternative fuel infrastructure solutions. The funds will be used to establish more than 100 state of the art liquid propane (Autogas) refueling stations in major U.S. cities in coordination with CleanFUEL USA partners, including ConocoPhillips. Other supporting partners include the Texas State Technical College, the Central Texas Clean Cities Coalition, Rush Truck Centers, 16 additional area Clean Cities Coalitions and the Propane Education and Research Council. The propane network will provide retail consumers as well as municipal, state and private fleets greater access to a cost effective and clean-burning alternative transportation fuel.....Read the entire article

Oil Rises Above $72 as Dollar Weakens to Lowest Level This Year

Crude oil rose above $72 a barrel as the dollar dropped to the lowest level against the euro this year before OPEC’s scheduled announcement today that its members will maintain output targets. Oil added to yesterday’s gain of 4.5 percent in New York as the falling U.S. currency spurred investors’ demand for dollar priced assets to hedge against inflation. The Organization of Petroleum Exporting Countries should maintain existing output quotas and improve compliance when it meets, the group’s production-monitoring committee recommended late yesterday. “The oil market is going to remain focused on the dollar and what other commodities do,” said Phil Flynn, vice president of research at PFG Best, a Chicago based brokerage. “We are all expecting OPEC to celebrate where prices are and pay lip service to better compliance in the future”.....Read the entire article

Oil Demand To Return To Pre-Recession High In 2012 - Report

World oil demand is set to grow next year for the first time since 2007 and return to pre-recession levels by 2012, according to IHS Cambridge Energy Research Associates in its quarterly World Oil Watch report. The rebound would mark a turnaround from the largest drop in global oil demand since the oil crisis of the early 1980s. IHS CERA expects oil demand growth to resume by 900,000 barrels per day (bd) in 2010 and return to its 2007 high of 86.5 million barrels per day (mbd) by 2012 a five year turnaround. "There are a lot of questions as to whether things will be 'different this time' in terms of the recovery of oil demand," said IHS CERA chairman and Pulitzer Prize-winning author of The Prize, Daniel Yergin. "While the answer is that it will be shorter, it is still going to take a substantial amount of time".....Read the entire article

How Low Can Natural Gas Go?

From guest analyst Jena Cartter of PCIFX, A New Horizon Of Perfection.

If one were to look up a textbook definition of a bear market, this year's natural gas market would be it. Yesterday, lead month Natural Gas futures fell to lows not seen since March of 2002, as the EIA weekly storage report showed 65 billion cubic feet (bcf) of gas was placed into storage last week. Although this figure was in line with expectations and well below the 95 bcf injected into storage this time last year, traders continued to focus on weak industrial demand as well as burdensome supplies.

Including last week's build, U.S. supplies of Gas in storage now total 3.323 trillion cubic feet (tcf), which is 18% above the 5-year average. It was a perfect storm for gas bulls this year, with industrial demand expected to be down just over 8.5% this year and summer cooling demand which never really materialized due to relatively cool summer weather in the Midwest and on the east coast. The market psychology is so bearish that traders have not been able to build a 'weather premium' into prices, despite entering the peak Atlantic hurricane season during the month of September. Should the storm season spare the Gas infrastructure in the Gulf of Mexico this year, it is possible we may see a record amount of Gas in storage going into the winter.

November 1st is considered the 'official' start of the heating season in the U.S., in which energy producers begin to draw Gas out of storing to meet heating demand. Some traders believe we may reach maximum storage capacity of just under 3.9 tcf before this occurs. The previous record was 3.545 tcf of gas in storage in 2007. Large speculators are holding a large net short position in Natural Gas futures according to the most recent Commitment of Traders report (COT). According to the COT, large non-commercial traders were net short 89,239 contracts as of August 25th. Small speculative traders were net long 49,161 contracts.

This information really highlights the trading styles of large and small speculators, as large speculators have historically been trend followers who will add to wining trades as the market moves in their direction. Small speculators like to try to pick tops and bottoms in a market, which is a difficult task for those lacking the funds to hold a position in the midst of a strong trending market.

Technical Notes
Looking at the daily chart for October Natural Gas, we notice prices accelerated to the downside once the July 13th low of 3.584 was taken out. This was the bottom of a two month long consolidation pattern that gave way in the direction of the major trend. The 14 day RSI is currently reading an extremely oversold 18.24, but has not yet shown any signs of reversing. 2.250 is seen as the next psychological support point for the October futures, with the 20 day moving average, currently near the 3.325 area, acting as resistance.

Visit the PCIFX website for more great analysis.