Crude Oil Bulls Still Have The Technical Advantage

July crude oil closed higher on Wednesday as it extends this spring's rally. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term.

If July extends the rally off April's low, the 25% retracement level of the 2008-2009 decline crossing at 68.49 is the next upside target. Closes below the 20 day moving average crossing at 58.54 would confirm that a short term top has been posted.

Thursday's pivot point, our line in the sand is 62.97

First resistance is today's high crossing at 63.82
Second resistance is the 25% retracement level crossing at 68.49

First support is the 10 day moving average crossing at 60.57
Second support is the 20 day moving average crossing at 58.54

US Energy Dept Oil Inventories 11:00 AM ET.

Crude Oil Stocks...................368.52M
Crude Oil Stocks...(Net Change)....-900K....-2.11M
Gasoline Stocks....................203.95M
Gasoline Stocks...(Net Change).....-2M......-4.34M
Distillate Stocks..................148.13M
Distillate Stocks...[Net Change)...+1.2M....+672K
Refinery Usage.....................82%......81.8%

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The June Dollar closed higher due to short covering on Wednesday as it consolidated some of this month's decline. The mid range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near term.

If June extends this month's decline, weekly support crossing at 78.77 is the next downside target. Multiple closes above the 20 day moving average crossing at 82.46 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 81.28
Second resistance is the 20 day moving average crossing at 82.46

First support is last Friday's low crossing at 79.90
Second support is weekly support crossing at 78.77

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The June S&P 500 index closed lower on Wednesday due to profit taking as it consolidated some of Tuesday's rally. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are turning neutral signaling that sideways trading is possible near term.

From a broad perspective, June needs to close above 929.00 or below 875.40 to clear up near term direction in the market.

Thursday's pivot point for the SP 500 is 899

First resistance is today's high crossing at 913.80
Second resistance is last Wednesday's high crossing at 923.20

First support is Tuesday's low crossing at 876.90
Second support is the reaction low crossing at 875.40

Crude Oil Closes Higher In The Face Of Higher Dollar

July crude oil closed higher on Wednesday as it extends this spring's rally. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term.

If July extends the rally off April's low, the 25% retracement level of the 2008-2009 decline crossing at 68.49 is the next upside target. Closes below the 20 day moving average crossing at 58.54 would confirm that a short term top has been posted.

First resistance is today's high crossing at 63.82
Second resistance is the 25% retracement level crossing at 68.49

First support is the 10 day moving average crossing at 60.57
Second support is the 20 day moving average crossing at 58.54

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The June S&P 500 index closed lower on Wednesday due to profit taking as it consolidated some of Tuesday's rally. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are turning neutral signaling that sideways trading is possible near term.

From a broad perspective, June needs to close above 929.00 or below 875.40 to clear up near term direction in the market.

First resistance is today's high crossing at 913.80
Second resistance is last Wednesday's high crossing at 923.20

First support is Tuesday's low crossing at 876.90
Second support is the reaction low crossing at 875.40

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The June Dollar closed higher due to short covering on Wednesday as it consolidated some of this month's decline. The mid range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near term.

If June extends this month's decline, weekly support crossing at 78.77 is the next downside target. Multiple closes above the 20 day moving average crossing at 82.46 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 81.28
Second resistance is the 20 day moving average crossing at 82.46

First support is last Friday's low crossing at 79.90
Second support is weekly support crossing at 78.77

Oil Rises To New Six Month High, Exxon Claims Strategy Built Investor Value, Precision Sees Slow Summer

"Oil Rises to a Six Month High After Saudi Forecasts $75 a Barrel"
Oil rose above $63 a barrel for the first time in six months after Saudi Arabia’s oil minister said crude is likely to touch $75 by the end of the year. Asian demand has begun to recover and prices at $75 a barrel will be healthy for economic growth, Ali al-Naimi said today in Vienna, where OPEC will meet this week to discuss production targets. A government report tomorrow is forecast to show that U.S. gasoline supplies fell for a fifth week.....Complete Story

"ExxonMobil's Financial Strength, Strategy Build Value for Investors"
Exxon Mobil Corporation's financial strength and industry leading performance continues to provide shareholders with superior value while delivering energy to fuel economic growth and protecting the environment, the corporation said today at its Annual Meeting of Shareholders. "Despite the volatile economic times, ExxonMobil remains committed to investing in integrated solutions to the energy challenge," said Rex W. Tillerson, chairman and chief executive officer. "Our disciplined and consistent performance.....Complete Story

"Precision Drilling Chief Neveu Sees Slow Summer"
Precision Drilling Trust, Canada’s largest oil well driller, is bracing for a continuation of a slump caused by low commodity prices. “It looks like a lousy summer for drilling,” Chief Executive officer Kevin Neveu said at a conference in Toronto. “The only difference between this downturn and other downturns is customers are running through their contracts.” Precision has about 18 rigs that are idle and fully paid for under contracts, Neveu told analysts at the Raymond James Oilfield Services conference.....Complete Story

Crude Oil Sets New Six Month High

July crude oil was higher overnight as it extends this spring's rally. Stochastics and the RSI are overbought, diverging but are neutral to bullish signaling that sideways to higher prices are possible near term. As I write we are trading above 1st resistance at a new six month high, a 40% increase just this year.

Most professional traders will tell you that there is no reason for us to be trading crude at these levels but yet they are buying the dips every chance we get.

I am not sure it matters but traders will be watching the OPEC gathering this week where most traders expect OPEC leaders to hold production steady.

If July extends this spring's rally, the 25% retracement of the 2008-2009 decline crossing at 68.49 is the next upside target. Closes below the 20 day moving average crossing at 58.53 are needed to confirm that a short term top has been posted.

Wednesday's pivot point, our line in the sand is 61.54

First resistance is the overnight high crossing at 63.45
Second resistance is the 25% retracement level crossing at 68.49

First support is Tuesday's low crossing at 59.53
Second support is the 20 day moving average crossing at 58.52

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The June Dollar was higher overnight due to short covering as it consolidated above the 62% retracement level of the July-March rally crossing at 79.80. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near term.

If June extends the decline off April's high, the 62% retracement level of the aforementioned rally crossing at 79.80 is the next downside target. Closes above the 20 day moving average crossing at 82.46 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 81.27
Second resistance is the 20 day moving average crossing at 82.46

First support is last Friday's low crossing at 79.90
Second support is the 62% retracement level crossing at 79.80

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The June S&P 500 index was higher overnight as it extends Tuesday's rally. Stochastics and the RSI are turning neutral signaling that sideways trading is possible near term.

For today I believe most day traders are seeing bullish set ups easily taking us from above our pivot point to 915. Beyond that we do have an unfilled gap at 924.75 that the bulls could have in their sights if buyers step into this market.

If June extends this week's rally, last week's high crossing at 923.20 then this month's high crossing at 929.00 are the next upside targets. Closes below the reaction low crossing at 875.40 would confirm that a short term top has been posted.

Wednesday's pivot point, our line in the sand is 899

First resistance is last week's high crossing at 923.20
Second resistance is this month's high crossing at 929.00

First support is Tuesday's low crossing at 877.00
Second support is last Monday's low crossing at 875.40

The June S&P 500 Index was up 1.70 points. at 910.40 as of 6:01 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.

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Crude Oil Closes Higher, Extending This Spring's Rally

July crude oil closed higher on Tuesday as it extends this spring's rally. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term.

If July extends the rally off April's low, the 25% retracement level of the 2008-2009 decline crossing at 68.49 is the next upside target. Closes below the 20 day moving average crossing at 58.42 would confirm that a short term top has been posted.

First resistance is today's high crossing at 62.50
Second resistance is the 25% retracement level crossing at 68.49

First support is today's low crossing at 59.53
Second support is the 20 day moving average crossing at 58.42

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The June Dollar closed higher due to short covering on Tuesday as it consolidated some of this month's decline. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near term.

If June extends this month's decline, weekly support crossing at 78.77 is the next downside target. Multiple closes above the 20 day moving average crossing at 82.67 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 81.51
Second resistance is the 20 day moving average crossing at 82.67

First support is last Friday's low crossing at 79.90
Second support is weekly support crossing at 78.77

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The June S&P 500 index closed sharply higher on Tuesday and the high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are turning neutral signaling that sideways trading is possible near term.

From a broad perspective, June needs to close above 929.00 or below 875.40 to clear up near term direction in the market.

First resistance is today's high crossing at 910.90
Second resistance is last Wednesday's high crossing at 923.20

First support is today's low crossing at 876.90
Second support is the reaction low crossing at 875.40

Today’s Stock Market Club Trading Triangles

Oil Rises On Consumer Confidence Report, Majors Switching Strategy

"Oil Rises to Six Month High as U.S. Consumer Confidence Gains"
Crude oil rose to a six month high after a report showed that U.S. consumer confidence jumped to the highest level since September, signaling demand may rebound. Oil followed gains in the stock market after the Conference Board’s sentiment index surged to 54.9, more than forecast and the biggest increase since 2003, the New York based research group said today. Oil futures declined earlier on speculation OPEC will maintain production quotas at a meeting this week. “History shows that a jump in consumer confidence signals an economic rebound,” said Bill O’Grady, chief markets strategist at Confluence Investment.....Complete Story

"Switching Horses On Oil Strategy"
Thunder Horse turns 10 next month. BP's billion barrel oil field, discovered in 1999 in the Gulf of Mexico, is a source of pride. It also is a reminder of what ails the oil majors. Thunder Horse, which started up in 2008, will provide 42% of BP's incremental upstream production over the next three years, according to analysts at J.P. Morgan Chase. Unfortunately, it is also one of BP's few discoveries of such scale in recent memory. Neil McMahon of Sanford C. Bernstein calculates that less than half of BP's additions to reserves over the past five years have come through its exploration efforts.....Complete Story

"Hottest Oil Options Show 18% Drop as Demand Falls"
After oil passed $60 a barrel for the first time in six months, the New York Mercantile Exchange’s fastest growing options trade in July is for a 18 percent drop.The number of options to sell oil at $50 a barrel for July settlement rose 22 percent last week to 24,948. Traders expect prices to fall because U.S. crude inventories are 1.8 percent below the highest level in two decades, the International Energy Agency says demand is falling the most since 1981, and there’s enough unsold crude stored in offshore tankers to supply the U.S. for a week. Oil traded as high as $62.16 today.....Complete Story

Crude Oil Struggles To Continue It's Rally

July crude oil was lower overnight due to profit taking as it consolidates some of this spring's rally. Stochastics and the RSI are overbought, diverging and are turning bearish signaling that a short term top is in or is near.

It seems that most day traders are looking for any excuse to buy the dips and continue going long this market. But with commercials increasing their short position's at a sharp pace the crude oil rally may not be sustainable.

We will continue to watch the SP 500 as it struggles to stay above key trading levels [876-880] and the U.S. Dollar as it appears to be responding to geo-political events. Both are the biggest threats to crude oil bulls at this point.

At this point it looks like natural gas will test it's lows of 3.25 and will continue to try to drag crude oil down with it.

Closes below the 20 day moving average crossing at 58.29 are needed to confirm that a short term top has been posted. If crude oil could extend this spring's rally, the 25% retracement of the 2008-2009 decline crossing at 68.49 is the next upside target.

Tuesday's pivot point, our line in the sand is 61.42

1st resistance is 61.95
2nd resistance is 62.70
3rd resistance is 63.23

1st support is 60.67
2nd support is 60.14
3rd support is 59.39

The weekly pivot is 60.23

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

The June Dollar was higher overnight due to short covering as it consolidated above the 62% retracement level of the July-March rally crossing at 79.80. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near term.

If June extends the decline off April's high, the 62% retracement level of the aforementioned rally crossing at 79.80 is the next downside target. Closes above the 20 day moving average crossing at 82.70 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 81.56
Second resistance is the 20 day moving average crossing at 82.70

First support is last Friday's low crossing at 79.90
Second support is the 62% retracement level crossing at 79.80

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

The SP 500 traded lower Monday evening and it appears most traders are looking for this market to go lower. Volume is generally low on these "1st day after the holiday" days, but we could creep right through the critical levels, 874-880. The U.S. Dollar looks to be in charge as it is reacting to news out of North Korea.

Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 875.40 would confirm that a short term top has been posted. If traders take this market through the 874 support level there is little resistance keeping us from trading the 820 area.

Tuesday's pivot point, our line in the sand is 888

1st resistance is 893.50
2nd resistance is 902

1st support is 880
2nd support is 874

The weekly pivot point is 894.25

1st weekly resistance is 912.25
1st weekly support is 865.50

The June S&P 500 Index was down 7.60 points. at 877.30 as of 5:57 AM CST. Overnight action sets the stage for a lower opening by the June S&P 500 index when the day session begins later this morning.

Oil Above $50 Saves Gulf States, Crude Oil Declines on Speculation Rally May Be Unsustainable

"Oil Above $50 Saves Gulf States During Crisis"
While their biggest customers may continue to wallow in recession into 2010, the oil producing nations of the Persian Gulf are again luring foreign investment and looking for places to park their own wealth. Crude prices that have stabilized above $50 a barrel mean the Middle East’s oil rich economies are likely to pull out of the global financial crisis sooner than the rest of the world. Saudi Arabia, the largest Arab economy and the world’s biggest oil exporter, is attracting renewed interest from investors including leveraged-buyout firm KKR & Co. Qatar and Abu Dhabi have returned to international capital markets.....Complete Story


"PetroChina To Buy 45.5 Per Cent Stake in SPC For $1 Billion"
PetroChina, the world's second most valuable oil and gas company after Exxon Mobil Corp yesterday said it was buying a 45.5-per cent stake in oil refiner Singapore Petroleum Company (SPC) for S$1.47 billion ($1.02 billion). The agreement was signed between PetroChina's indirectly wholly owned subsidiary, PetroChina International (Singapore) Pte Ltd, and Keppel Oil and Gas Services Pte Ltd, a wholly owned subsidiary of Singapore based Keppel Corporation Limited, which is part owned by Singapore investment company Temasek Holdings Pte. Ltd.....Complete Story

"Crude Oil Declines on Speculation Rally May Be Unsustainable"
Crude oil futures fell, extending their decline on concern that this year’s 37 percent rally is unsustainable because of sluggish demand brought on by the recession and a stronger dollar. The U.S. currency rose against the euro after North Korea said it conducted “successful” nuclear weapons test today, spurring demand for the relative safety of the dollar and reducing the attractiveness of commodities as an inflation hedge. “Oil’s rally above $60 a barrel was helped by positive equity markets and a weaker dollar, while the supply-demand balance provides a very different picture.....Complete Story

Crude Oil Closes Higher On Friday, Sets The Stage For Higher Open On Tuesday

July crude oil closed higher on Friday and 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 July extends the rally off April's low, the reaction high crossing at 61.33 is the next upside target. Closes below the 25% retracement level of the 2008-2009 decline crossing at 68.49 are needed to confirm that a short term top has been posted.

First resistance is Wednesday's high crossing at 62.26
Second resistance is the 25% retracement level crossing at 68.49

First support is the 10 day moving average crossing at 59.88
Second support is the 20 day moving average crossing at 57.37

Today’s Stock Market Club Trading Triangles

The June Dollar closed lower on Friday and below December's low crossing at 80.20. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bearish signaling that additional weakness is possible near term.

If June extends this month's decline, weekly support crossing at 78.77 is the next downside target. Multiple closes above the 20 day moving average crossing at 83.22 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 81.99
Second resistance is the 20 day moving average crossing at 83.22

First support is today's low crossing at 79.90
Second support is weekly support crossing at 78.77

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

If June extends this week's decline, the 25% retracement level of this spring's rally crossing at 862.80 is the next downside target. Closes above the 10 day moving average crossing at 896.88 would temper the near term bearish outlook in the market.

First resistance is the 10 day moving average crossing at 896.88
Second resistance is Wednesday's high crossing at 923.20

First support is Thursday's low crossing at 878.00
Second support is the reaction low crossing at 875.40

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Crude Oil Rises As Dollar Continues To Show Weakness

"Crude Oil Rises as Dollar Drops Against Euro, Equities Gain"
Crude oil rose as the dollar fell to a four month low against the euro and the U.S. stocks increased for the first time in four days. Oil rose as much as 1.5 percent in New York after the dollar dipped against major currencies on speculation the U.S. may lose its AAA credit rating. Equities gained as unexpected profit at Sears Holdings Corp. overshadowed concern the government faces higher interest rates to finance the rescue of the financial industry......Complete Story

USO & Crude Oil On The Move Click Here

"Oil Market Turns to OPEC Advantage, But Pitfalls Abound"
Global oil markets have turned in OPEC's favor after months of drilling a hole in the cartel's coffers, but internal wrangling in the producer group could still cap recent oil price gains. The Organization of Petroleum Exporting Countries' deep production cuts over the past five months are beginning to whittle down a mountain of excess supply. World crude demand appears to be stabilizing and will get a top up with the start of the.....Complete Story

Is the Dollar in Trouble? Click Here

"Venezuela Oil Keeps Luring Bidders in Bets Chavez Isn’t Forever"
Chevron Corp. and Total SA are pursuing new Venezuelan oil projects after President Hugo Chavez tore up past agreements, seized assets of contractors and expelled producers that wouldn’t accept new terms. The strategy, producers and analysts say, is to tap crude reserves that Chavez touts as the world’s largest. Decisions to push ahead under a regime whose leader vows to “bury capitalism” are bets that the companies can buy enough time to outlast Chavez, said Peter Zeihan, a vice president at Stratfor, a geopolitical.....Complete Story

Weak U.S. Dollar Continues To Support Crude Oil Bulls

Thursday's sell off in crude yesterday seemed to be led by weakness in the equity markets in reaction to warnings that the UK could lose its AAA rating, increasing demand concerns about the global economy going forward. The decline was tempered by the energy sector getting a boost from a weak US dollar that set multi month lows against the Euro.

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

If July extends this spring's rally, the 25% retracement of the 2008-2009 decline crossing at 68.49 is the next upside target. Closes below the 20 day moving average crossing at 57.37 are needed to confirm that a short term top has been posted.

I expect day traders trading the long side to pour in around the 59.90 area "if" we have any pull back at all today. That's a big if as the dollar continues to weaken this morning.

Friday's pivot point, our line in the sand is 60.95

1st resistance is 61.97
2nd resistance is 62.90
3rd resistance is 63.92

1st support is 60.02
2nd support is 59.00
3rd support is 58.07



The June Dollar was lower overnight as it extends this year's decline and spiked below December's low crossing at 80.25. Stochastics and the RSI are oversold but are bearish signaling that additional weakness is possible near term.

If June extends the decline off April's high, last September's low crossing at 76.91 is the next downside target. Closes above the 20 day moving average crossing at 83.23 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 82.02
Second resistance is the 20 day moving average crossing at 83.23

First support is the overnight low crossing at 80.20
Second support is last September's low crossing at 76.91

Crude Oil Closes Down, Bulls Still Have The Near Term Advantage

July crude oil closed down $1.03 at $61.00 a barrel today. Prices closed near mid range today and were pressured on profit taking and a lower U.S. stock market. Bulls still have the near term technical advantage. A four week old uptrend is in place on the daily bar chart.

July natural gas closed down 36.1 cents at $3.737 today. Prices closed near the session low, hit a fresh two week low and scored a bearish "outside day" down on the daily bar chart today. A bearish weekly gas storage report today pressured natural gas. Bears still have the near term technical advantage and regained downside momentum today.

The June U.S. dollar index closed down 47 points at 80.60 today. Prices closed near the session low and hit a fresh 4 1/2 month low again today. Prices are still in a 10 week old downtrend on the daily bar chart. Bears still have the near term technical advantage and have gained more strength this week.

The U.S. stock indexes closed solidly lower today. The indexes were pressured by a bearish weekly jobless claims report and by news that the U.K.'s credit rating has been lowered. Don't look for keen buying interest on Friday, ahead of a long holiday weekend in the U.S. Bulls should not become too confident in these still very troubled economic times.

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

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

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

Today’s Stock Market Club Trading Triangles

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

Crude Oil Lower As Markets React To Continous Job Claims

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

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

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

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

1st resistance is 62.67
2nd resistance is 63.67

1st support is 60.27
2nd support is 58.87

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

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

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

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

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

Oil Prices Rise On Supply Decline, Morgan Stanley Trader Banned

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

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

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

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

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

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

Lower Costs Give Crude Oil Drillers Some Breathing Room

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

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

Lower costs, along with a modest rebound in oil prices to more than $55 a barrel, helped several companies deliver better-than-expected earnings in the first quarter.
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Crude Oil Overbought, Signals Still Turning Bullish

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The June S&P 500 Index was up 2.50 points. at 909.00 as of 5:55 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.

10:30 AM Eastern Time

US Energy Dept Oil Inventories

Crude Oil Stocks (previous 370.6M)

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

Gasoline Stocks (previous 208.3M)

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

Distillate Stocks (previous 147.5M)

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

Refinery Usage (expected 84%; previous 83.7%)

Weaker U.S. Dollar Supports Crude Oil Uptrend

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

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

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

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