Pivotal Day For Crude Oil, Short Term Top May Be In

April crude oil closed lower due to profit taking on Wednesday as it consolidates some of its recent rally.

The low range close sets the stage for a steady to lower opening on Thursday.

Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at $42.27 would temper the near term friendly outlook in the market.

If April extends this month's rally, the reaction high crossing at $50.88 is the next upside target.

First resistance is Monday's high crossing at $48.83.

Second resistance is the reaction's high crossing at $50.88.

First support is the 20 day moving average crossing at $42.27.

Second support is the reaction low crossing at $39.44.

Crude Oil Falls After Report of Larger Than Expected U.S. Inventory Gain

"Iraq Inaugurates Oil Deal with China's CNPC"
Iraq inaugurated an oil project on Wednesday with the Chinese National Petroleum Company, activating the country's first major oil deal with a foreign firm since the fall of Saddam Hussein in 2003....Complete Story

"Crude Oil Falls After Report of Larger Than Expected U.S. Inventory Gain"
Crude oil futures fell after a U.S. government report showed a bigger than expected inventory gain as lower demand prompted refiners to slow processing....Complete Story


"Bad Weather Halts Kuwait Oil Exports"
Kuwait halted its oil exports of more than 2 million barrels per day on Tuesday due to bad weather, spokesman for state refiner Kuwait National Petroleum Co (KNPC) Mohammad Al-Ajmi said....Complete Story

Can The U.S. Economy Survive $80.00 Crude Oil

We have been saying for some time that the U.S. economy has found itself in the position that if oil spikes again even those that work will not be able to afford to drive, better yet the millions of unemployed. And that includes major industry.

For the first time since September of 2007, the crude oil (NYME_CL) market has flashed a positive signal that it is headed higher. This is the first buy signal that we have seen in over 18 months in the energy markets.

The big question is, if crude oil is headed higher, how much of a price increase can the US economy afford and withstand?

Find out here:Watch Video

Here is a raw commodity that is used by everyone and the U.S. has no control over. This key commodity to commerce just happens to be in areas that are normally hostile to the US. If we see a hiccup in the supply chain that changes this market dynamic, even for a short time period, we could see oil move back to the $80/barrel range in a heart beat.

So how will this affect the US equity markets? If crude oil heads back to the $75-$80 range, I expect that the major indices will head south. I call it the 551 syndrome. 5000 on the Dow, 500 on the S&P 500, and finally 1000 on the NASDAQ.

In this short video we will share with you the potential target zones we could see in the next 6 to 12 months in crude oil.

So with the trend in crude oil in a positive trajectory and the trend in the US equity markets in a negative trajectory, I think the two will feed off themselves. Look for traders and hedge funds to move aggressively in both these areas with abandon.

Lastly with no reinstatement of the up-tick rule, expect stocks to once again get pummeled to oblivion.

Find out here:Watch Video

Profit Taking Drives Crude Oil Lower

April crude oil closed lower due to profit taking on Tuesday as it consolidated some of Monday's rally.

The low range close sets the stage for a steady to lower opening on Wednesday.

Stochastics and the RSI are becoming overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If April extends this month's rally, the reaction high crossing at $50.88 is the next upside target.

Closes below the 20 day moving average crossing at $42.32 would temper the near term friendly outlook in the market.

First resistance is Monday's high crossing at $48.83.

Second resistance is the reaction's high crossing at $50.88.

First support is the 10 day moving average crossing at $44.15.

Second support is the 20 day moving average crossing at $42.32.

10:30 AM ET. Mar 6 US Energy Dept Oil Inventories

...Crude Oil Stocks (previous 350.59)

...Crude Oil Stocks (Net Change) (expected -300K; previous -757K)

...Gasoline Stocks (previous 215.51)

...Gasoline Stocks (Net Change) (expected -700K; previous +168K)

...Distillate Stocks (previous 143.2M)

...Distillate Stocks (Net Change) (expected +400K; previous +1.67M)

...Refinery Usage (expected 83%; previous 83.1%)

Chevron To Ramp Up Large Projects, Kazakhstan Will Not Allow Downturn To Effect Their Projects

"Chevron to Buck Downturn with Major Project Developments"
Chevron says it is well positioned in 2009 with a strong balance sheet and numerous projects coming on stream. The company expects new project start ups and continued ramp ups to contribute production of 650,000 barrels per day....Complete Story

"Kashagan Production Still Scheduled for 2012"
The economic downturn will not affect the development of Kazakhstan's Kashagan oil field, said a Shell executive. First production is still scheduled for the fourth quarter 2012....Complete Story

"U.S. Lowers Forecast for 2009 Global Oil Demand as Recession Cuts Fuel Use"
The U.S. reduced its forecast for 2009 global crude oil consumption for the sixth month in a row as the economic slowdown cuts fuel purchases....Complete Story

"OPEC Needs 100% Quota Compliance Before Further Cuts, Qatar's Attiyah Says"
OPEC, supplier of about 40 percent of the world’s oil, needs full compliance with production quotas before discussing a further reduction in output, Qatar’s oil minister said....Complete Story

Crude Oil Bulls Extend The Rally, First Resistance Now $48.83

April crude oil was steady to higher overnight as it extends last week's rally.

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

If April extends the rally, the reaction high crossing at $50.88 is the next upside target.

Closes below the 20 day moving average crossing at $42.39 would confirm that a short term top has been posted.

First resistance is Monday's high crossing at $48.83.

Second resistance is the reaction high crossing at $50.88.

First support is the 10 day moving average crossing at $44.30.

Second support is the 20 day moving average crossing at $42.39.

4:30 PM ET. Mar 6 API Oil Industry Report

............Crude Stocks (Net Change) (previous -463K)

............Gasoline Stocks (Net Change) (previous -642K)

............Distillate Stocks (Net Change) (previous +1.6M)

............Refinery Runs (previous 83.5%)

Oil Market Winners and Losers

Winners

Infinity 42.86%
Input/Output 40.66%
Stone Energy 24.86%
McMoRan Exploration 15.09%
Brigham Exploration 9.65%

Losers

TETRA Technologies -13.73%
FX Energy -12.70%
Allis-Chalmers Energy -11.54%
Pioneer Drilling -8.64%
Quicksilver Resources -8.05%

Change based on the last 2 days of trading

Crude Oil Rally Continues, Next Upside Target Is $47.99

April crude oil closed higher on Monday as it extends the rally off February's low.

The high range close sets the stage for a steady to higher opening on Tuesday.

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

If April extends this month's rally, February's high crossing at $47.99 is the next upside target.

Closes below the 20 day moving average crossing at $42.30 would temper the near term friendly outlook in the market.

First resistance is today's high crossing at $48.83.

Second resistance is the reaction's high crossing at $47.99.

First support is the 10 day moving average crossing at $43.53.

Second support is the 20 day moving average crossing at $42.31.

Oil Climbs On Speculation Of OPEC Cuts, Oil Companies Struggling To Limit Lay Offs

"Oil Climbs to Two Month High on Speculation OPEC Will Cut Output Further"
Crude oil rose to a two month high in New York on speculation the Organization of Petroleum Exporting Countries will decide to reduce output when ministers gather in Vienna on March 15....Complete Story

"Oil Industry Strives to Limit Its Layoffs"
As oil companies cut costs amid slumping energy prices, they are determined not to repeat the mistakes of the 1980s oil bust, when mass layoffs left the industry ill prepared for the eventual rebound....Complete Story

"Oil at $50 Looms Amid Prospects for More Restictions on OPEC Production"
OPEC’s record production cuts are draining the glut in world oil markets, leading traders to bet that $50 crude is two months away....Complete Story

"OPEC: Current Oil Prices Cannot Guarantee Future Market Stability"
OPEC is expected to lower production at its upcoming meeting. The OPEC Secretary General recently reported that the current excessively low oil prices cannot guarantee its long term stability in the crude market....Complete Story

Crude Oil Higher Overnight, Remains Above 20 Day Moving Average

April crude oil was higher overnight as it extends last week's breakout above the 20 day moving average crossing at $42.30.

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

If April extends the rally, February's high crossing at $47.99 is the next upside target.

Closes below last Tuesday's low crossing at $39.44 are needed to confirm that a short term top has been posted.

First resistance is the overnight high crossing at $47.03.

Second resistance is February's high crossing at $47.99.

First support is the 10 day moving average crossing at $43.52.

Second support is the 20 day moving average crossing at $42.30.