Crude Oil Closes Higher, Still Bearish Signals Point to Lower Prices

Crude oil closed higher due to short covering on Friday as it consolidated some of Thursday's decline. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

The mid range close sets the stage for a steady to higher opening on Monday. If November extends this week's breakout below trading range support crossing at 67.66, July's low crossing at 61.38 is the next downside target.

First resistance is the 20 day moving average crossing at 70.27
Second resistance is last Thursday's high crossing at 73.16

First support is today's low crossing at 65.05
Second support is July's low crossing at 61.38

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Natural gas closed higher on Friday as it extends this month's rally. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term.

If October extends this month's rally, the 38% retracement level of this year's decline crossing at 4.082 is the next upside target. Closes below the 20 day moving average crossing at 3.260 would temper the near term friendly outlook in the market.

First resistance is today's high crossing at 4.04
Second resistance the 38% retracement level at 4.08

First support is the 10 day moving average crossing at 3.66
Second support is the 20 day moving average crossing at 3.26

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The December Dollar closed lower due to profit taking on Friday but remains above the 10 day moving average crossing at 76.71. The mid range close sets the stage for a steady opening on Monday. Stochastics and the RSI are turning bullish hinting that a short term low might be in or is near.

Closes above the 20 day moving average crossing at 77.40 are needed to confirm that a short term low has been posted. If December extends this month's decline, monthly support crossing at 75.73 is the next downside target.

First resistance is Monday's high crossing at 77.33
Second resistance is the 20 day moving average crossing at 77.40

First support is Wednesday's low crossing at 76.22
Second resistance is monthly support crossing at 75.73

Serious Near Term Chart Damage Inflicted on Crude Oil

Crude oil closed down $3.05 at $65.92 a barrel today. Prices closed near the session low again today and hit a fresh nine week low. Serious near term chart damage was inflicted today as prices saw a big and bearish downside "breakout" from the recent trading range at higher price levels. Crude bears now have the near term technical advantage.

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Natural gas closed up 14.0 cents at $4.894 today. Prices closed nearer the session high again today and hit a fresh six week high. Prices are in a two week old uptrend on the daily bar chart. Bulls gained upside technical momentum today, but have more work to do to suggest prices can continue to trend higher.

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The U.S. dollar index closed up 80 points at 77.09 today. Prices closed near the session high today on a short covering in a bear market. Bears still have the solid overall near term technical advantage. Bulls' next upside price objective is to close prices above solid technical resistance at 78.00.

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Natural Gas Advances in New York on Signs of Rebound in Demand

Natural gas futures rose in New York for the third straight day amid speculation that a strengthening economy and colder U.S. weather will increase demand and begin to draw down near record high inventories. A government report today showed an unexpected drop in U.S. jobless claims, a sign the economy is pulling out of the recession. Demand for gas starts to rise in November as temperatures fall.

“The question is how hard are we going to hit storage?” said Teri Viswanath, director of commodities research at Credit Suisse Securities USA in Houston. The market has priced in record high storage and is now focused on the prospect that a cold U.S. winter will lead to inventory draw downs, she said. Natural gas for October delivery rose 9.5 cents, or 2.5 percent, to close at $3.955 per million Btu on the New York Mercantile Exchange. The fuel was trading at $3.774 before the supply report was released at 10:30 a.m. in Washington.....Read the entire article

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Oil Falls to a 1-Month Low on Larger Than Expected Supply Gains

Crude oil fell to a one month low after a government report of a larger than forecast gain in U.S. fuel supplies signaled that a glut is forming in the world’s biggest energy consuming country. U.S. gasoline stockpiles surged 5.41 million barrels last week, more than 10 times what was forecast by analysts in a Bloomberg News survey. Inventories of distillate fuel, a category that includes heating oil and diesel, rose 2.96 million barrels, almost double what was estimated. Crude oil supplies also climbed in the week ended Sept. 18.

“We had three major stock builds and increases in the year on year surplus,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. “We are testing support and will have to see if we can break out of the recent range”.....Read the entire article

Crude Oil Prices Weaker Going Into Thursday Trading

Crude oil prices are weaker early today and trading has turned choppy. In November crude, look for buy stops to reside just above resistance at $69.00 and then just above resistance at $70.00. Look for sell stops just below technical support at $68.00 and then more sell stops just below support at the September low of $67.66. Today's key near term Fibonacci support/resistance level: $69.90. Wyckoff's Intra-Day Market Rating: 4.5 Thursday's pivot point for crude oil is 69.39

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The U.S. dollar index is slightly higher in early trading today. Bears still have the solid overall near-term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter-term technical resistance at the overnight high of 76.63 and then at 76.95. Shorter-term support is seen at the contract low of 76.04 and then at 75.75. Today's key near-term Fibonacci support/resistance level: 76.89. Wyckoff's Intra Day Market Rating: 5.0

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December S&P 500: The shorter term moving averages (4, 9 and 18 day) are still bullish early today. The 4 day moving average is above the 9 day and 18 day. The 9 day is above the 18 day moving average. Short term oscillators (RSI, slow stochastics) are neutral to bearish early today.

Today, shorter term technical support comes in at this week's low of 1,051.80 and then at 1,040.00. Sell stops likely reside just under those levels. Upside resistance for active traders today is located at last week's and last week's high of 1,070.50 and then at Wednesday's high of 1,075.50. Buy stops are likely located just above those levels. Wyckoff's Intra- day Market Rating: 5.0 Today's key near term Fibonacci support/resistance level: 1,056.00.

Pivot:--------------- 1,063.30
1st Support:-------- 1,051.10
2nd Support:-------- 1,043.30
1st Resistance:----- 1,071.10
2nd Resistance:----- 1,083.30

Crude Oil Falls a Second Day on Gains in U.S. Fuel Stockpiles

Crude oil declined for a second day after a U.S. government report showed a larger than expected increase in fuel stockpiles in the world’s largest energy consuming nation. Gasoline stockpiles in the U.S. surged 5.4 million barrels last week, the Energy Department said yesterday. That’s more than the 500,000 barrel increase forecast in a Bloomberg News survey of analysts. Diesel and heating oil inventories jumped almost 3 million barrels, double what was expected, and crude oil stockpiles also climbed.

“If products aren’t moving, then there’s no demand for crude,” Sentje Diek, an energy analyst at HSH Nordbank AG, said by phone from Hamburg. “Gasoline and distillate stockpiles are clearly above their five year average.” Crude oil for November delivery fell as much as 95 cents, or 1.4 percent, to $68.02 a barrel in electronic trading on the New York Mercantile Exchange. It was at $68.49 at 11:11 a.m. London time. Coupled with a 3.9 percent plunge yesterday, the two day decline has reduced oil’s year to date gain to 54 percent, from more than 60 percent last week.....Read the entire article

Following the Jockeys in the Oil Patch

You’re only as good as your last deal.

Buy the jockey, not the horse.

That’s what came to mind today when I read that Eagle Rock Explorations (ERX-TSXv) was bringing in a new management and re-capitalizing this 550 boe producer operating in Alberta and Saskatchewan. Half the new group is from Crescent Point Energy (CPG-TSX) the most highly valued intermediate oil producer on the TSX. That’s a great calling card. The other half comes from Wild River and Prairie Schooner, two junior producers that were build and sold earlier this decade.

And the Eagle Rock stock showed the worth of this team, quadrupling to 32 cents on huge volume of 12 million shares – 22% of the stock outstanding. Many investors follow this strategy, find successful management teams who have built and sold companies before, and follow them on every deal. So in my next issue for subscribers, due out in the first couple weeks of October, I will profile three new young companies that are the new ventures for three highly successful management teams in the Canadian oil patch.....Read the entire article

Where is Crude Oil Headed on Thursday?

CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed tomorrow.




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Crude Oil Bulls Fail to Defend $69 Level

Crude oil closed down $3.21 at $68.55 a barrel today. Prices closed near the session low today. Trading has turned choppy in crude. Bulls faded badly today. Crude bulls still have the slight near term technical advantage. The next downside price objective for the crude oil bears is to produce a close below solid technical support at the September low of $67.66.

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Natural gas closed up 20.1 cents at $4.721 today. Prices closed nearer the session high again today. Prices are still in a two week old uptrend on the daily bar chart. However, bulls have more work to do to suggest prices can continue to trend higher.

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The U.S. dollar index closed up 24 points at 76.59 today. Prices closed near the session high today on a late rally after hitting another fresh contract low early on. Short covering in a bear market was featured. Bears still have the solid overall near term technical advantage. There are still no early technical clues that a market low is close at hand for the index.

Phil Flynn: Go Ahead and Make my Day

Go ahead and make my day. Commodity prices explode in what really shouldn’t be called trading, it should be called tainting. One day after paying all “due respect” to the Federal Reserve the dollar tanked and the commodities rallied almost trash talking the Federal Reserve and daring them to do something about it. I know what you’re thinking, did the Fed cut rates 4 times or was it five? In fact in all the excitement I kind of forgot myself.

I guess the question is: does the Fed feel lucky? Well do ya punk? The commodity markets are confident that the Fed is powerless at this point and does not have the courage to challenge the dollar. Everyone knows that the Fed can’t raise rates and the Fed will keep the target range for the federal funds rate at 0 to 1/4. The fact is the market does not believe the Fed has the courage to even hint at an exit strategy. Go ahead, keep printing money.....Read the entire article

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Crude Oil Drops Below $69 After Unexpected U.S. Supply Gain

Crude oil fell below $69 a barrel in New York after a U.S. Energy Department report showed an unexpected increase in stockpiles as refineries idled units for seasonal maintenance and fuel demand dropped. Inventories climbed 2.86 million barrels to 335.6 million last week, the report showed. A decline of 1.4 million barrels was forecast, according to the median of 17 analyst responses in a Bloomberg News survey. Supplies of gasoline and distillate fuel, a category that includes heating oil and diesel, rose more than estimated.

“These numbers are bearish across the board,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “We’ve been in a $60 to $75 range since early July. Prices should go down and test the bottom end of the range after these numbers.” Crude oil for November delivery fell $2.59, or 3.6 percent, to $68.96 a barrel at 10:49 a.m. on the New York Mercantile Exchange. Futures touched $68.57, the lowest since Sept. 15.....Read the entire article

Crude Oil Trading Choppy Ahead of FOMC Statement

Crude oil prices are near steady early today. Trading has turned choppy. In November crude, look for buy stops to reside just above resistance at $72.00 and then just above resistance at Monday's high of $72.65. Look for sell stops just below technical support at $71.00 and then more sell stops just below support at $70.00. Pivot point for crude oil today is 71.18. Today's key near term Fibonacci support/resistance level: $70.65. Wyckoff's Intra Day Market Rating: 5.0

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The December U.S. dollar index is slightly lower in early trading today, and hit yet another fresh contract low overnight. Bears still have the solid overall near term technical advantage. Slow stochastics for the dollar index are neutral early today. The dollar index finds shorter term technical resistance at 76.50 and then at Tuesday's high of 76.95. Shorter term support is seen at the overnight contract low of 76.11 and then at 76.00. Today's key near term Fibonacci support/resistance level: 77.32. Wyckoff's Intra Day Market Rating: 4.0

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December S&P 500: The shorter term moving averages (4, 9 and 18 day) are bullish early today. The 4 day moving average is above the 9 day and 18 day. The 9 day is above the 18 day moving average. Short term oscillators (RSI, slow stochastics) are neutral to bullish early today. Today, shorter term technical support comes in at the overnight low of 1,064.00 and then at Tuesday's low of 1,059.50. Sell stops likely reside just under those levels. Upside resistance for active traders today is located at last week's and the overnight high of 1,070.50 and then at 1,080.00. Buy stops are likely located just above those levels. Wyckoff's Intra day Market Rating: 5.5 Today's key near term Fibonacci support/resistance level: 1,039.00.

Pivot point--------- 1,065.35
1st Support:-------- 1,061.50
2nd Support:-------- 1,055.65
1st Resistance:----- 1,071.20
2nd Resistance:----- 1,075.05

Oil Falls After Industry Report Shows Increase in Fuel Supplies

Crude oil fell in New York after an industry report showed an increase in fuel supplies in the U.S., adding to signs demand has yet to recover in the world’s largest energy consumer.Oil pared yesterday’s 2.6 percent gain after a report from the industry funded American Petroleum Institute showed U.S. gasoline stockpiles climbed the most since January. The Energy Department report today is expected to show increases in the nation’s fuel inventories, according to a Bloomberg News survey.


“We’ve been expecting a demand recovery but we still haven’t seen much of a justification in the supply demand fundamentals,” said Toby Hassall, a research analyst with CWA Global Markets Pty in Sydney. “The underlying supply-demand profile still suggests the market could be vulnerable to a pullback”.....Read the entire article

Finding the Right Oil Plays Is Easier than You Think

It's a mistake that too many people make. I'm not immune, by any means. In fact, one of the first trades I ever made proved to be an important lesson. The mistake was simple. Several years ago, I was star struck by a big name in natural gas and thought buying this company would prove a win win deal for me. A few months later, I swallowed my pride and ended up taking the big loss.

Believe me, it's a mistake I won't make again, and the good (if any) that comes from a loss is that the bad deals end up being the ones we learn from. So what has me thinking about a painful trade from the past? A reader of mine recently shared what he called, in his words, a 'hugely successful trading story.' At first, I was elated. . . I'm always in the mood to hear a good story from one of my readers. Yet the moment he told me the name of the company.....Read the entire article

The Chinese Oil Demand Teaser

One day China’s oil demand is bad and the next, good. Welcome to another mystery from The Middle Kingdom. Yesterday oil prices were pressured on reports of bulging inventories in China and weak demand. Platts reported that Chinese oil demand in August slid 5.4% from July. Platts said that China's implied oil demand totaled 33.02 million metric tons in August versus 34.92 million metric tons in July. Oil refiners in China are reporting that demand is still weak. Reuter’s news reported that Chinese oil company Sinopec had sales of refined oil products still lower than one year ago. Reuters says that despite a moderate inventory draw in August, China's diesel inventories had been building up faster than gasoline had in past months, reflecting the slower consumption for the main transportation fuel used by Chinese industry and trucks.....Read the entire article

New Video: The Reason Why Gold Hasn’t Skyrocketed

With the printing presses in full printing mode, many people are questioning why gold prices haven’t gone higher....much higher.

In our new video, we explain some of the subtle market cycles that are at play right now in this market. These short term cycles have been the dominant force in gold all year and appear to be still in control of price action.

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

Crude oil rose for the first time in four days as the dollar declined, bolstering the appeal of commodities as a hedge against inflation. Oil climbed as much as 2.9 percent as the U.S. currency slipped to $1.4821 per euro, its weakest level since Sept. 23, 2008. Net crude oil imports by China, Asia’s biggest energy consuming country, increased 18 percent to 17.92 million metric tons in August, the second highest level on record.

“More than anything else, we are seeing a reaction to the incredible weakness of the dollar,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “Yesterday, the dollar strengthened and oil fell more than $2. Now the dollar’s plunged to the lowest level against the euro in a year and look what’s happened”.....Read the entire article

Oil Options Hit Highs as Verleger Predicts 44% Plunge

Oil traders are paying more than ever in the options market to protect against a plunge in crude prices. The gap between prices of options betting on a decline and those that would profit from a rise in oil widened to a record 10 percentage points, according to five years of data compiled by Bank of America Securities Merrill Lynch. Crude stockpiles in the U.S. are 14 percent larger than a year ago and OPEC is pumping 600,000 barrels a day more than the world needs, according to the International Energy Agency.

While the recovery from the first global recession since World War II pushed oil up 62 percent this year to $72.04 a barrel in New York, growth alone isn’t likely to erode the glut by the end of next year because production exceeds demand, data from the Paris based IEA shows. A drop in prices would penalize companies from Exxon Mobil Corp. to BP Plc and exporters.....Read entire article

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