Oil Trades Above $74 on Speculation Supplies Dropped Last Week

Oil held steady above $74 a barrel in New York before a U.S. Energy Department report likely to show crude stockpiles fell last week as temperatures dropped. The report today is expected to show oil inventories in the U.S., the world’s biggest energy consumer, shrank by 1.6 million barrels in the week ended Dec. 18, according to the median estimate of 16 analysts polled by Bloomberg News. Data from the industry funded American Petroleum Institute yesterday showed commercially held U.S. inventories fell by 3.71 million barrels.

“Due to cold weather, we are seeing stock draws in crude and that is the supporting factor these days,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich. “It brings the inventory levels nearer to the five year average.” Crude oil for February delivery rose as much as 47 cents, or 0.6 percent, to $74.87 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $74.66 as of 10:36 a.m. London time. Futures closed yesterday at $74.40, the highest settlement since Dec. 4. There will be no trading on Dec. 25 for Christmas and on Jan. 1 for New Year’s Day.....Read the entire article.


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Crude Oil and Natural Gas Technical Outlook For Wednesday Morning

Nymex Crude Oil (CL)

Crude oil's recovery from 68.58 is still in progress and further rise cannot be ruled out. But still, upside is expected to be limited by 61.8% retracement of 82.0 to 68.58 at 76.87 and bring resumption of the fall from 82.0. On the downside, below 71.21 will indicate that recovery from 68.58 has completed and will flip intraday bias for this support first. Break will target 65.05 key support next. However, decisive break of 76.87 fibo resistance will argue that fall from 82.0 has completed and will turn focus back to this resistance.

In the bigger picture, at this point, crude oil is still limited by 55 days EMA (now at 74.47) and hence, we're favoring the case that medium term rise from 33.2 has completed at 82.0 with bearish divergence condition in daily MACD. Another fall is expected after finishing the current recovery from 68.58 and a break there will target 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60). Break there will confirm this bearish case and indicate that the down trend from 147.27 might be resuming for another low below 33.2. However, sustained trading above mentioned 76.87 will dampen this bearish view and argue that another high above 82.0 might be seen before crude oil tops in 76.77/90.24 fibo resistance zone.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

Nymex Natural Gas (NG)

Natural gas' consolidation from 5.929 is still in progress and intraday bias remains neutral for the moment. More sideway trading should be seen with risk of another fall to 4 hours 55 EMA (now at 5.535) and below. But downside is expected to be contained well above 4.837 support (61.8% retracement of 4.157 to 5.929 at 4.834) and bring rally resumption. Above 5.930 will target 38.2% retracement of 13.694 to 2.409 at 6.72 next.

In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005 and might have completed at 2.409 already. Rise from 2.409 should not be completed yet and we would continue to anticipate an upside breakout of the recent range of 4.157/5.138 eventually. Above 5.318 will target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.432 support will dampen this bullish case and turn outlook mixed again.....Nymex Natural Gas Continuous Contract 4 Hours Chart.

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CNBC Video: Crude Oil Predictions for 2010

John Licata, chief investment strategist at Blue Phoenix Inc tells CNBC's Sri Jegarajah and Karen Tso that he sees the price for crude at $87/barrel by the later half of 2010.




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Crude Oil Closes Higher, Ending Two Day Correction

Crude oil closed higher on Tuesday ending a two day correction. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 75.45 are needed to confirm that a short term low has been posted. If January resumes the decline off October's high, the 87% retracement level of this fall's rally crossing at 68.16 is the next downside target.

First resistance is the 20 day moving average crossing at 75.45
Second resistance is last Friday's high crossing at 74.69

First support is the 10 day moving average crossing at 73.27
Second support is last Monday's low crossing at 68.59

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Natural gas closed higher due to short covering on Tuesday as it consolidated some of Monday's decline. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought and are turning bearish signaling that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 5.149 would temper the near term friendly outlook in the market. If January extends this month's rally, the 87% retracement level of this fall's decline crossing at 6.036 is the next upside target.

First resistance is Monday's high crossing at 5.929
Second resistance is the 87% retracement level of this fall's decline crossing at 6.036

First support is the 10 day moving average crossing at 5.459
Second support is the 20 day moving average crossing at 5.149

Can you learn to trade crude oil in just 90 seconds?

The U.S. Dollar closed higher on Tuesday as it extends this month's rally. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If March extends its current rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target. Closes below the 20 day moving average crossing at 76.44 would temper the near term friendly outlook in the Dollar.

First resistance is today's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is the 10 day moving average crossing at 77.45
Second support is the 20 day moving average crossing at 76.44

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Oil Falls as U.S. Growth Revised Lower, OPEC Maintains Quotas

Crude oil fell after the U.S. economy expanded at a slower pace than anticipated in the third quarter and OPEC agreed to maintain production targets. Oil slipped after the Commerce Department said that the gross domestic product grew 2.2 percent from July through September, down from a 2.8 percent gain previously reported. The Organization of Petroleum Exporting Countries will hold quotas at 24.845 million barrels a day. “This was a significant revision,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant. “This should weigh on prices.”

Crude oil for February delivery dropped 47 cents, or 0.6 percent, to $73.25 a barrel at 10:14 a.m. on the New York Mercantile Exchange. Prices are up 64 percent this year. This was the fourth time this year that OPEC ministers met without revising production figures. Today’s meeting was held in Luanda, Angola. Rising prices have encouraged some OPEC members to renege on their pledge in 2008 to reduce output by 4.2 million barrels a day. Members complied with 58 percent of cuts in November, down from 60 percent the previous month, according to International Energy Agency estimates.....Read the entire article.


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Crude Oil and Natural Gas Technical Outlook For Tuesday Morning

Nymex Crude Oil (CL)

With 71.21 minor support intact, crude oil's recovery from 68.58 might still extend further. But after all, upside is expected to be limited by 61.8% retracement of 82.0 to 68.58 at 76.87 and bring resumption of the fall from 82.0. On the downside, below 71.21 will indicate that recovery from 68.58 has completed and will flip intraday bias for this support first. Break will target 65.05 key support next. However, decisive break of 76.87 fibo resistance will argue that fall from 82.0 has completed and will turn focus back to this resistance.

In the bigger picture, at this point, crude oil is still limited by 55 days EMA (now at 74.47) and hence, we're favoring the case that medium term rise from 33.2 has completed at 82.0 with bearish divergence condition in daily MACD. Another fall is expected after finishing the current recovery from 68.58 and a break there will target 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60). Break there will confirm this bearish case and indicate that the down trend from 147.27 might be resuming for another low below 33.2. However, sustained trading above mentioned 76.87 will dampen this bearish view and argue that another high above 82.0 might be seen before crude oil tops in 76.77/90.24 fibo resistance zone.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

Nymex Natural Gas (NG)

With 4 hours MACD crossed below signal line, an intraday top should be in place at 5.929 and bias is turned neutral for the monument. Some consolidations could be seen with risk of retreat to 4 hours 55 EMA (now at 5.499). But downside is expected to be contained well above 4.837 support (61.8% retracement of 4.157 to 5.929 at 4.834) and bring rally resumption. Above 5.930 will target 38.2% retracement of 13.694 to 2.409 at 6.72 next.

In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005 and might have completed at 2.409 already. Rise from 2.409 should not be completed yet and we would continue to anticipate an upside breakout of the recent range of 4.157/5.138 eventually. Above 5.318 will target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.432 support will dampen this bullish case and turn outlook mixed again.....Nymex Natural Gas Continuous Contract 4 Hours Chart.

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Where is Crude Oil Headed on Tuesday?

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




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Low Range Close in Crude Oil Set's The Stage For Lower Opening on Tuesday

Crude oil closed lower due to profit taking on Monday as it consolidated some of last week's rally. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 74.04 are needed to confirm that a short term low has been posted. If January resumes the decline off October's high, the 87% retracement level of this fall's rally crossing at 68.16 is the next downside target.

First resistance is the 20 day moving average crossing at 74.04
Second resistance is last Friday's high crossing at 74.69.

First support is the 10 day moving average crossing at 71.51
Second support is last Monday's low crossing at 68.59

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Natural gas closed lower due to profit taking on Monday as it consolidated some of this month's rally. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If January extends this month's rally, the 87% retracement level of this fall's decline crossing at 6.036 is the next upside target. Closes below the 20 day moving average crossing at 5.104 would temper the near term friendly outlook in the market.

First resistance is today's high crossing at 5.929
Second resistance is the 87% retracement level of this fall's decline crossing at 6.036

First support is the 10 day moving average crossing at 5.401
Second support is the 20 day moving average crossing at 5.104

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

If March extends its current rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target. Closes below the 20 day moving average crossing at 76.29 would temper the near term friendly outlook in the Dollar.

First resistance is last Friday's high crossing at 78.50
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is the 10 day moving average crossing at 77.25
Second support is the 20 day moving average crossing at 76.29

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China's Oil Demand for November Up by 18.7%

According to Platts, China's apparent oil demand in November soared 18.7% from a year ago as the country's economic recovery picked up momentum. November's surge in oil demand marked the third straight month that the world's second largest oil consumer posted double digit yearly growth in oil demand. Chinese oil demand was estimated to reach 33.67 million mt (8.22 million barrels per day) in November, versus 28.36 million mt a year ago, a Platts analysis of official data showed on December 21. November oil demand was slightly less than the 33.89 million metric tons (8.01 million b/d) seen in October.

"China has pulled out all the stops this year to be sure that its economy has performed well throughout the global financial crisis. That has had a dramatic impact on oil demand in the country," said Dave Ernsberger, Platts senior editorial director for Asia. "Lifting demand for oil by double digits month after month was not Beijing's goal when it injected half a trillion dollars into its economy this year, but it was one of the most significant consequences".....Read the entire article.


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Crude Oil Continues Climbing as Recovery Makes Most Accurate Forecasters Bullish

Oil’s biggest annual rally since 1999 is poised to continue with gains of at least 19 percent next year as the global economy recovers and OPEC curtails production, the most accurate crude forecasters say. Societe Generale SA’s Mike Wittner and Hannes Loacker at Raiffeisen Zentralbank Oesterreich AG, whose predictions this year that were within 9 percent of market levels, now say oil will average $92.50 and $88, respectively, in the fourth quarter of 2010, up from current prices of about $74 in New York. The median Wall Street estimate is for an increase to $83.

Oil is set to rise as China and India lead the world economy from its biggest economic shock since World War II, while the Organization of Petroleum Exporting Countries caps output, Wittner and Loacker said. Analysts say OPEC will keep supply targets unchanged at a meeting in Luanda, Angola, tomorrow, even as the International Energy Agency predicts fuel consumption will rise 1.7 percent next year. “With global demand growing and OPEC holding production flat, stockpiles are going to come down, and that’s bullish for prices,” said Wittner, 48, the head of oil market research at Societe Generale in London. Commodities will also benefit from the weak dollar and U.S. interest rates close to zero percent, he said.....Read the entire article.

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