Commodities Move Sideways But With A Mildly Bullish Tone

Crude oil recovers modestly in European morning. Rise in Asian stock markets and strong sentiment index in Germany boost price. Currently trading at 72.2, the benchmark contract will continue its narrow trading ahead of oil inventory report.
Germany's IFO business climate index rose to 90.5 in August, compared with market expectation of 89.1, from 87.3 in the prior month. Leading the surprisingly strong number was a +4.6 point increase in the 'expectations' component. The 'current conditions' component also gained +1.8 points during the month. In Asia, stocks advanced as several Chinese companies' reported better than expected earnings results. The MSCI Asia Pacific Index surged.....Complete Story

Crude Oil Falls as Dollar Strengthens on Chinese Demand Concern

Crude oil fell for a second day as the dollar strengthened, undermining demand for assets used to hedge against inflation. Oil dropped as much as 1.9 percent as the dollar advanced on a report by the Xinhua News Agency that China is studying curbs on industrial overcapacity, increasing concern the global economic recovery will slow. Oil also declined after an unexpected gain in crude inventories. “The fact that we are getting some strength in the dollar is certainly a contributing factor to the recent weakness we are seeing in oil,” said Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania. “There’s still a lot of supply in this market and not a lot of demand”.....Complete Story

Peak Oil? Crude Oil Supply Data Doesn't Lie

After the epic crash last year, the price of oil is stabilizing and it should rise exponentially over the following years. Over the past year, global consumption has stayed weak, however once the economy recovers, crude oil should resume its secular bull market. Despite the 'demand destruction' hype, it is interesting to note that during this severe global recession, worldwide oil usage has dropped by a minuscule 2.7%. So, what will happen when the world comes out of this recession? Who will rise up to the challenge and meet our insatiable thirst for energy? These are critical questions not many are willing to ask. According to the US Department of Energy, liquid fuel demand in the developed nations peaked in August 2005 at 41.89 million barrels per day..... Complete Story

Oil Falls a Second Day After Report Shows U.S. Supplies Rose

Crude oil fell for a second day after an industry report showed that inventories rose last week. Oil dropped as much as 1.7 percent after the American Petroleum Institute reported yesterday that oil supplies climbed 1.3 percent, the most since April, to 346.7 million barrels. The Energy Department will say in a report today that stockpiles fell 1.15 million barrels last week, according to a Bloomberg survey of analysts.“If we’re seeing actual builds in inventories, especially crude inventories, that might imply we’re seeing a bit of a rush to the market with new supply coming in,” said Brad Samples, a commodity analyst for Summit Energy Inc., an energy management company in Louisville, Kentucky.....Complete Story

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Oil Post Key Reversal Day, Lower Prices Possible Near Term

Crude oil posted a key reversal down on Tuesday and closed below the 20 day moving average crossing at 71.85 confirming that a double top with June's high as been posted. Stochastics and the RSI are diverging and are turning neutral signaling that sideways to lower prices are possible near term. The low range close sets the stage for a steady to lower opening on Wednesday.

Closes below last Monday's low crossing at 67.42 would confirm that a short term top has been posted. If October extends this month's rally, June's high crossing at 75.27 is the next upside target.

First resistance is today's high crossing at 75.00
Second resistance is June's high crossing at 75.27

First support is today's low crossing at 71.11
Second support is last Monday's low crossing at 67.42

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The U.S. Dollar closed slightly lower on Tuesday as it consolidates below the 20 day moving average crossing at 78.62. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If September renews last week's decline, the reaction low crossing at 77.52 is the next downside target. Closes above last Monday's high crossing at 79.36 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 78.66
Second resistance is last Monday's high crossing at 79.69

First support is last Friday's low crossing at 77.81
Second resistance is the reaction low crossing at 77.52

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Natural gas closed lower on Tuesday. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are oversold but are neutral to bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 3.429 would confirm that a short term low has been posted.

If September extends this month's decline, monthly support crossing at 2.640 is the next downside target.

First resistance is the 10 day moving average crossing at 3.10
Second resistance is broken support crossing at 3.37

First support is Monday's low crossing at 2.73
Second support is monthly support crossing at 2.64

Bloomberg Technical Analysis: Oil Risks Drop to $71.50 If Rally Stalls

Crude oil risks falling toward $71.50 a barrel if prices are unable to surpass a “strengthening level” near $75 in the coming days, according to Societe Generale. Oil has the potential to rise as high as $78 a barrel only if it can push past a $74.65 to $75.25 band, said Stephanie Aymes, a London based commodity technical analyst for the bank. A failure to break this resistance may trigger the unwinding of gains made over the past week. Prices will “further rise but mind $74.65/$75.25,” she said in a report yesterday. “Under $71.50 the correction resumes.” Oil climbed to a 10 month high above $74 a barrel yesterday on speculation the global economy is recovering from recession.....Complete Story

Crude Oil Lower on Overnight Profit Taking

Crude oil was lower overnight due to profit taking as it consolidates some of last week's rally. Stochastics and the RSI are diverging but remain bullish signaling that sideways to higher prices are possible near term.

If October extends last week's rally, June's high crossing at 75.27 is the next upside target. Closes below last Monday's low crossing at 67.42 would confirm that a top has been posted.

Tuesday's pivot point, our line in the sand is 74.13. The weekly pivot point is 71.85.

First resistance is Monday's high crossing at 74.81
Second resistance is June's high crossing at 75.27

First support is the 10 day moving average crossing at 72.29
Second support is the 20 day moving average crossing at 71.96

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The U.S. Dollar was steady to slightly lower overnight. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If September extends last week's decline, the reaction low crossing at 77.52 is the next downside target. Closes below the reaction low crossing at 77.52 would renew this summer's decline.

First resistance is the 10 day moving average crossing at 78.66
Second resistance is last Monday's high crossing at 79.69

First support is last Friday's low crossing at 77.81
Second support is this month's low crossing at 77.52

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Natural gas was steady to lower overnight as it consolidates some of Monday's short covering rally. Stochastics and the RSI are oversold and are turning bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 3.432 are needed to confirm that a short term low has been posted.

If September extends this month's decline, weekly support crossing at 2.640 is the next downside target.

Natural gas daily pivot point for Tuesday is 2.88, the weekly is 2.95

First resistance is the 10 day moving average crossing at 3.10
Second resistance is broken trading range support crossing at 3.37

First support is Monday's low crossing at 2.73
Second support is weekly support crossing at 2.64

Oil Drops From 10 Month High as Stocks Fall, Dollar Strengthens

Crude oil dropped from a 10 month high as concerns that China may tighten lending and more U.S. loans may default pushed equities lower and strengthened the dollar, reducing the investment appeal of commodities. Oil declined as investors sought so called safe haven assets such as the dollar over commodities. Oil also fell in tandem with equities on concern that the Chinese government would curb new loans and SunTrust Banks Inc. said that U.S. lenders face more credit losses and commercial real estate may falter through 2010. “Equity and oil markets have been very closely correlated in the last six months,” said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne.....Complete Story

Transocean Maintains Strength In Numbers

The world's largest offshore drilling contractor with 141 jackups, semisubmersibles and drillships, Transocean has been able to maintain its strength through offshore innovation and acquisitions. Merging with Global Santa Fe in 2007 to cement its place as the world's largest offshore drilling fleet, Transocean has consistently set its sights on pushing the boundaries of technology. In fact, Transocean owned and operated the world's first ever jackup rig in 1954. Through the decades, the company has continued to achieve a number of industry firsts, and that spirit of innovation has helped to turn Transocean into an industry leader.....Complete Story