Non-OPEC Oil Supply Outages Remain Above Year Ago Level

How do Hedge Funds Trade the First 30 Minutes the Markets are Open?

The volume of unplanned oil production disruptions among countries not in the Organization of the Petroleum Exporting Countries (OPEC) is one of several key measurements of global oil supply security. Unplanned non OPEC oil supply outages during the first 10 months of this year were almost twice the amount experienced in the last three months of 2011.

Global surplus capacity, another key metric of global oil supply security, currently remains relatively tight by historical standards, and is estimated at 2.0 million barrels per day (bbl/d) in October. (The estimate for global surplus capacity does not include additional capacity that may be available in Iran, but which is currently offline due to the impacts of U.S. and European Union (EU) sanctions on Iran's ability to sell its oil.) Tighter global surplus capacity, coupled with an elevated volume of non OPEC supply disruptions, has placed upward price pressure this year on Brent crude, a benchmark for the global oil price.



Conflict, tariff disputes, worker strikes, natural disasters, and maintenance related problems were some of the prominent issues that caused several countries to reduce or shut in oil production in 2012 (see chart). As a result, unplanned non-OPEC oil supply outages during the first 10 months of this year averaged almost twice the level of disruptions experienced during the last three months of 2011, which is more representative of historical norms.

Recently, unplanned non-OPEC supply outages have declined, from an average of about 1.1 million bbl/d in both August and September to 0.9 million bbl/d in October. This is mainly due to the return of U.S. production in the Gulf of Mexico, which was temporarily curtailed by Hurricane Isaac in August and September of 2012. Nonetheless, an above normal volume of non OPEC production remains offline due to large outages in Syria and South Sudan, which together accounted for almost two thirds of the total non OPEC unplanned outages in October. Non-OPEC supply outages represented nearly 2% of the total non OPEC supply, which averaged 52.7 million bbl/d in October.

The situation in Syria continues to deteriorate, and its impact on oil prices arguably transcends disrupted volumes in that country, as concerns grow about the risk of regional spillover effects from the conflict. The government of South Sudan ordered oil companies to restart production last month, and production is expected to gradually resume within the next few months. South Sudan has signed an agreement with Sudan on oil export fees and security arrangements; however, some post independence issues such as border demarcation, rights to the disputed Abyei region, and claims for compensation of seized assets still remain unresolved.

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How do Hedge Funds Trade the First 30 Minutes the Markets are Open?

We have been day trading for years, back to the days when we got excited that we could now use this new technology and fax our orders in. And so much has changed over the years on the technology side. But a lot of things still have not changed one bit. Most importantly is the ability to use market psychology when getting the upper hand on traders and investors on the other side of your trades.

Yes, it's true.....we all can't be winners. There is a losing trade on the other side of every one of your winning trades. And I still, after all these years, believe that most of those losing trades are being placed by retail and professional traders that insist on breaking the rules of Trading 101. The pros know them better then anybody and they still continue to allow their emotions to dictate their trades.

That's why I have partnered with my friend Todd Mitchell in promoting his New 30 Minute E-Mini Breakout Strategy. This is a time tested system that takes your emotion out of the equation and allows you to make your trades in the first 30 minutes that the market is open, then go on with your life. Regardless of news cycles and market reactions. I am buying this for myself, we have traders in our family and our shop that will benefit from the immensely. So should you.

It's free to sign up, watch Todd's video and ask him questions about the program and the way the system works. This is the guy that hedge fund managers are sending their new employees to so they can use the system in their shops. Why wouldn't you take a minute to sign up, read the comments traders are leaving about the program and ask Todd your own questions.

OK, enough of me....I need to get ready for the first 30 minutes of trading on Monday.

See you in the markets,
Ray C. Parrish
President/CEO at The Crude Oil Trader

Just Click Here for "The New 30 Minute E-Mini Breakout Strategy"

ONG: Crude Oil, Natural Gas and Gold Weekly Technical Outlook for Sunday Nov. 11th

 It's Sunday and that means it's time to check in with our friends at Oil N'Gold.com and get their call on commodities this week.......

After some volatility, crude oil dipped further to 84.05 last week before recovering mildly. Initial bias is neutral this week for some sideways trading first. Nonetheless, note that crude oil is still staying inside near term falling channel. As long as 89.22 minor resistance holds, deeper decline is still in favor. Below 84.05 will target 80 psychological level next. Though, we'd expect strong support ahead of 77.28 and bring rebound. Meanwhile, break of 89.22 should indicate short term reversal and target 93.66 resistance and above.

In the bigger picture, current development suggests that price actions from 114.83 are a triangle consolidation pattern. Fall from 100.42 is likely the fifth and the last leg of such consolidation. Having said that, downside should be contained above 77.28 and bring an upside breakout eventually. Break of 110.55 will strongly suggest that whole rebound from 33.29 has resumed for above 114.83.

In the long term picture, crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2. The corrective structure of the rise from 33.2 indicates that it's second wave of the consolidation pattern. While it could make another high above 114.83, we'd anticipate strong resistance ahead of 147.24 to bring reversal for the third leg of the consolidation pattern.

Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts

Natural gas consolidated around 4 hours 55 EMA last week and outlook remains unchanged. As long as 3.355 support holds, further rally is still expected. Rise fro 2.575 would extend to medium term channel resistance next (now at around 3.88). Break will target 4.0 psychological level. However, considering that it's near to important resistance level, break of 3.355 will indicate near term topping and would bring deeper pull back towards 55 days EMA (now at 3.233).

In the bigger picture, recent developments argued that medium term decline from 6.108 is completed at 1.902 already. It's bit early to confirm but bullish convergence condition in weekly MACD suggests that the down trend from 13.694 (2008 high) is possibly over too. Sustained break of the channel resistance (now at around 3.88) will set the stage for a test on 4.983 key resistance next. Meanwhile, break of 2.575 support will argue that the rebound from 1.902 is over and the medium larger down trend is still in progress for a new low.

In the longer term picture, decisive break of 3.255 resistance will be an important signal of long term bottoming reversal and could at least give a push to 4.983/6.108 resistance zone.

Nymex Natural Gas Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts

The rebound and break of 1727.5 resistance suggests that a short term bottom is formed at 1672.5 in gold. Initial bias is mildly on the upside this week for recovery. But we might see strong resistance ahead of 1798.1 high and bring another decline. Meanwhile, below 1703 minor support will flip bias back to the downside for 50% retracement of 1526.7 to 1798.1 at 1662.4 and below.

In the bigger picture, price actions from 1923.7 high are viewed as a medium term consolidation pattern. There is no indication that such consolidation is finished, and more range trading could be seen. In any case, downside of any falling leg should be contained by 1478.3/1577.4 support zone and bring rebound. Meanwhile, break of 1792.7/1804.4 resistance zone will argue that the long term up trend is possibly resuming for a new high above 1923.7.

In the long term picture, with 1478.3 support intact, there is no change in the long term bullish outlook in gold. While some more medium term consolidation cannot be ruled out, we'd anticipate an eventual break of 2000 psychological level in the long run

Comex Gold Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts

Our most popular post of the week "Did the SP500 Finally Bottom?"

Did the SP500 Finally Bottom?

From our trading partner David A. Banister at Market Trends Forecast.com......

The SP 500 finally caved to match or go a bit lower than the SP 500 futures lows of about 11 days ago in yesterday’s action. The drop to the 1390 area is within our 1386-1400 pivot points for a major wave low pattern that we outlined as far back as September 25th for our subscribers.

Our work centers around sentiment and crowd behavior, the headlines are of interest but only tell you the psychology of the publishing arms or talking heads at the time. Often headlines can be negative and the market climbs, or positive and the market is dropping. So the key for our work is figuring out where we are in the sentiment patterns of the crowd, and then to anticipate the pivots ahead of time and invest accordingly.

In fact, in just 24 hours or so we had a 43 point SP 500 drop… this is interesting because the same thing happened at the June 2012 lows as well. Back then we had outlined pivots in the 1250-1270 areas as likely lows, and the market ended up bottoming at 1267. This bottom area yesterday fits within pivots we were able to anticipate 7 weeks ago, without any knowledge of the election or other headlines around the world.

Often, major washout days like yesterday centering around major news (Election) can create the final panic sell-off to complete a wave pattern of negative sentiment to the downside and then reverse the markets higher in new bullish pattern. To be sure, there are many sentiment headwinds like the Fiscal Cliff and more in the coming weeks…but markets tend to price all that in ahead of time right?

At yesterdays lows the market seems to have completed all requirements for a C wave of an ABC complicated decline from the 1474 SP 500 highs and so far an 8 Fibonacci week correction period.

What we expect is a rally now and again, we need to get back up and over 1423-1427 pivots this time and hold more than 24 hours, but the odds of a rally are now at 75% from here. IF we fail to hold the 1388 pivots, then the next levels are 1372 and 1363 to watch.

Bottom Line? Most metrics have been met for a wave pattern low, (Whether this be wave 4 or wave 2 doesnt much matter just yet) and the market now has a chance to start a wave 5 or wave 3 rally to the upside. Lets watch 1388 areas to hold first, then we will watch 1403, then 1423-1427 pivots to clear. We are neutral to bullish now after this washout

Back on Sept 25th we did a chart forecasting a drop to 1395-1400 as likely before the downtrend would end, now let’s see if the market can get some legs here. We have included that old chart here to show you how crowds are fairly predictable in their behavioral patterns in advance.



Consider joining us for free weekly reports, or you can get a subscription discount and daily reports at Market Trends Forecast.com

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Post Election Trading Made Simple

Our trading partner Chris Vermeulen gives us his take on trading the post election markets.......

Over the past two months shares of gold (GLD) and Apple (AAPL) have had a sizable bite taken out of their share price. Active traders along with the longer term investors have had a wild ride this fall watching these investments slide to multi month lows. The big question is when will gold and apple shares bounce?

Here we are again with another election behind us and Barack Obama in the White House again. Many think this means four years of the same thing… Printing, Inflation and higher stock prices.

Is this good or bad for Americans or the world for that matter? I doubt it, but who really knows and who cares because there is nothing anyone can do about it now. So buckle up your seat belt and focus on trading and investing with major trend both within the United States and abroad using exchange traded funds.

Currently the broad stock market and commodities are in a full blown bull market so the focus should be to buy the dips until proven wrong. Here are some charts showing the important breakout levels for Apple, metals, oil and key indexes like the Russell 2000.....Check out "Post-Election Trading Made Simple"

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Another Layer of Bureaucracy for Oil and Gas Exploration in the US?

On May 11, 2012, the U.S. Bureau of Land Management (BLM) published proposed regulations governing "Oil and Gas; Well Stimulation, Including Hydraulic Fracturing, on Federal and Indian Lands." BLM is a latecomer to this party. Its belated meddling lacks practical or economic justification. Instead, the proposed BLM rule would drive oil and gas developers off federal and tribal lands. Complying with the rules is too complicated and costly. Producers can realize a much faster and much better return on their capital investment by developing oil and gas reserves on adjoining private lands.

Federal and tribal lands hold large reserves of oil and natural gas. At a time when the United States desperately needs to move toward, not away from, energy independence, it makes no sense to let bureaucratic meddling effectively place these valuable domestic reserves out of reach. The problems with BLM's approach are myriad. BLM Misses the Mark

First, a central, federal, "one size fits all" approach does not work. The reserves that the oil and gas industry wants to access using hydraulic fracturing occur in areas with different geographic, topographic, hydrological, population, precipitation and umpteen other characteristics. The oil and gas deposits are found at different depths; the water table is at different depths. The surface and subsurface vary dramatically, ranging from the Marcellus Shale Formation in the Northeast to the San Juan Basin in the Southwest. States and tribes have long ago stepped up to the plate with sensible regulations suitable to their individual conditions. They are way ahead of BLM.

Second, even if states and tribes did not already have this under control, BLM's proposed regulations are inappropriate. The BLM regs are based on inaccurate assumptions, flawed economics and a perceived but actually nonexistent need.....

Read the entire article "Another Layer of Bureaucracy for Oil and Gas Exploration in the US"

Discover the Little Known Strategies, Tips and Ideas for Profiting in Today's Markets.....

Why E-Minis Are One of Our Favorite Markets

We here at the Crude Oil Trader don't talk about E-Mini trading a lot, but there's a reason why the E-Mini futures are one of our favorite markets to trade.....

They're just so darn consistent, the opportunities are easy to spot, and the potential for making daily income is unlike any market we've ever seen!

The problem is most people approach the E-Minis all wrong....

Well, that's about to change....

You'll see what we mean inside of the free video presentation our trading partner Todd Mitchell created for you here.

Not only will you discover the real reason why so many traders use the E-Minis to make money, but he shows you how you can start taking advantage of these opportunities regardless of how large or small your trading account is.

Access is limited [really, no kidding] and that's why we don't intend to leave this video up for long, so please be sure to watch it today!

In this video Todd will also teach you the 3 times of day that offer the most profitable trading opportunities (and when you want to stay out of the market!), how to pull in profits without struggle, a 4 - step sequence to boost your trading profits immediately, and a lot more.

This could be the game changer you are looking for...Click here to watch the video.

Happy trading and we'll see you in the markets!

Ray C. Parrish
President/CEO at The Crude Oil Trader

The Election Cycle – What to Expect in Stocks & Bond Prices

By: Chris Vermeulen of The Gold & Oil Guy.com.......

It is that time in the presidential cycle that gets everyone emotional and concerned with the future outlook of the United States. While everyone has their opinion on whom they think is best for America, I promised myself a long time ago to keep my thoughts to myself for two key reasons. ONE: only 50% of Americans will agree with me J, and TWO: I am Canadian so I do not experience what Americans go through on a daily basis.

My thinking is if Obama wins then we will see Quantitative Easing continue. And with the recent positive economic numbers on Friday it should give some confidence to investors that things are SLOWLY stabilizing (Bullish for Stocks). But, if Romney wins then we could see Quantitative Easing be cut or eliminated which is obviously bad for equities.

So, let’s just jump into the charts of what I feel will unfold in the next few days and months.

Using the season chart of the four year election cycle we can see what the Dow Jones Index has done in past election periods. Obviously every market environment is drastically different in each situation but overall we see stronger stock price. This is naturally a very emotional time for investors but once the election is finished most individuals become more confident simply because there is a leader that has four years to make things better and there is nothing they can do about it now and the campaigning and debating is over.



DIA – Dow Jones Industrial Average – Daily Chart:

Looking at the chart of Dow DIA Index fund you can see a 5-6 month cycle in the market which has a positive skew. Just so you understand what a positive skew is I will explain.

Positive Skew is when the market is trending up making a series of higher highs and higher lows. Because there are naturally more buyers during a bull market each cycle upswing lasts longer then when the cycle down downswing. So you get longer rallies which sends your secondary indicators (stochastics, volatility, put/call ratios, advance decline line etc…) in the overbought levels for extended periods of time. Those trying to pick a top continually get their head handed to them. The focus must be on buying the pullbacks. Keep in mind volatility is higher which meaning risk per trade is higher. Overall in the long run you stand a much higher chance of making money trading with the trend than trying counter trend trades (picking a top).

So as you can see below it looks like the stock market will be trying to put in the bottom over the next week or two which falls in line with our election cycle. It is very important to know that during intermediate cycle lows is where some of the biggest drops take place. These sharp drops are what is needed to cleanse the market one last time to shake as many traders with tight stops out of the market before it reverses and starts the next rally. I would like to see a 1-3 day market sell off as that would be the signature bottoming pattern I like to buy.



Bond Prices – Moving Against the Norm…..

Bond investors are some of the most conservative people in the market. They do not like to take risks so they dump their money into bonds to make a tiny profit in exchange for low risk (volatility). The nature of these investors put more money into bonds as we enter the election because they are nervous about not knowing who will be in control of the country.

After the election finished some money flows out of bonds and into stocks because there is now a president and direction for the country. Generally come the new year investors move to bonds as the safe haven as they try to figure out what their game plan is for new year.

So looking forward to this week and the next 2 months I would not be surprised to see bond prices rise or trade sideways while stocks move higher. This analysis is based on Obama winning. If Romney wins then I feel bonds will rally much more and stocks could sell off.



TLT Bond Exchange Traded Fund – Daily Chart:

Here is a chart of 20+ year bonds showing a possible reversal to the upside that could trigger as soon as next week. This chart is forward looking 1 – 2 weeks. Overall the trend remains down but if Romney wins I feel bonds breakout above the red resistance levels and trigger a new uptrend.



Election Year Trading Cycle Conclusion:

Next week is going to be very interesting to watch unfold. I generally do not like to trade or invest before news of this magnitude so trade smaller sizes if you do as price action could be wild.

Get my Daily Trading Analysis & Trade Setups at The Gold & Oil Guy.com

Chris Vermeulen

EIA Weekly Natural Gas Report

Natural gas prices flattened out this week (Wednesday to Wednesday) following last week’s increases. The Henry Hub closed at $3.50 per million British thermal units (MMBtu) yesterday, up 7 cents per MMBtu for the week, after increasing last week by 19 cents per MMBtu. Prices mostly rose across the board, with the exception of general declines in the Rocky Mountain region and some declines in California.

The December 2012 New York Mercantile Exchange (NYMEX) decreased, from $3.776 per MMBtu last Wednesday to $3.692 per MMBtu yesterday. The November contract expired on October 29 at $3.471 per MMBtu.

Working natural gas in storage increased last week to 3,908 Bcf as of Friday, October 26, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). An implied storage increase of 65 Bcf for the week moved storage levels 136 Bcf above year-ago levels.

The Baker Hughes Incorporated natural gas rotary rig count fell by 11 to 416 active units on the week ending October 26. The oil-directed rig count decreased by 2 to 1,408 units.

Don't miss our most popular post this week "Stocks Overbought or Oversold? Where to Put Your Stops"

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ONG: Crude Oil, Natural Gas and Gold Weekly Technical Outlook for Saturday Nov. 3rd

Crude oil dropped further last week and breached mentioned 61.8% retracement of 77.28 to 100.42 at 86.12 as expected. Deeper decline is still in favor in near term. But as noted before, we'd expect strong support ahead of 77.28 support and bring rebound. So focus will be on reversal sign as the current decline extends. On the upside, above 87.42 resistance will indicate short term reversal and will turn bias back to the upside for 93.66 resistance and above first.

In the bigger picture, current development suggests that price actions from 114.83 are a triangle consolidation pattern. Fall from 100.42 is likely the fifth and the last leg of such consolidation. Having said that, downside should be contained above 77.28 and bring an upside breakout eventually. Break of 110.55 will strongly suggest that whole rebound from 33.29 has resumed for above 114.83.

In the long term picture, crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2. The corrective structure of the rise from 33.2 indicates that it's second wave of the consolidation pattern. While it could make another high above 114.83, we'd anticipate strong resistance ahead of 147.24 to bring reversal for the third leg of the consolidation pattern.

Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts

Near term outlook in natural gas stays bullish as long as 3.355 support holds even though upside momentum is not too convincing. Current rally from 2.575 should extend further towards medium term channel resistance next (now at around 3.92). Break will target 4.0 psychological level. However, considering that it's near to important resistance level, break of 3.355 will indicate near term topping and would bring deeper pull back towards 55 days EMA (now at 3.164).

In the bigger picture, recent developments argued that medium term decline from 6.108 is completed at 1.902 already. It's bit early to confirm but bullish convergence condition in weekly MACD suggests that the down trend from 13.694 (2008 high) is possibly over too. Sustained break of the channel resistance (now at around 3.92) will set the stage for a test on 4.983 key resistance next. Meanwhile, break of 2.575 support will argue that the rebound from 1.902 is over and the medium larger down trend is still in progress for a new low.

In the longer term picture, decisive break of 3.255 resistance will be an important signal of long term bottoming reversal and could at least give a push to 4.983/6.108 resistance zone.

Nymex Natural Gas Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts

Gold's fall from 1798.1 continued last week and broke mentioned 38.2% retracement of 1526.7 to 1798.1 at 1694.4 as expected. Near term outlook stays bearish as long as 1727.5 resistance holds. Current decline should target 61.8% retracement at 1630.4 and below.

In the bigger picture, price actions from 1923.7 high are viewed as a medium term consolidation pattern. There is no indication that such consolidation is finished, and more range trading could be seen. In any case, downside of any falling leg should be contained by 1478.3/1577.4 support zone and bring rebound. Meanwhile, break of 1792.7/1804.4 resistance zone will argue that the long term up trend is possibly resuming for a new high above 1923.7.

In the long term picture, with 1478.3 support intact, there is no change in the long term bullish outlook in gold. While some more medium term consolidation cannot be ruled out, we'd anticipate an eventual break of 2000 psychological level in the long run

Comex Gold Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts

Don't miss our most popular post this week "Stocks Overbought or Oversold? Where to Put Your Stops"

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Stocks Overbought or Oversold? Where to Put Your Stops

We did see a nice pop this morning breaking some previous pivot highs from last week and volume looks strong. Long story short… stocks are overbought here very similar to the past two highs as seen in the chart below. The big question from here is what to do now? Well, I wanna see some bullish patterns and volume over the next 12-48 hours if we are going to be looking to get long for an intermediate rally that lasts several weeks taking the indexes to new highs.

Take a look at the 10 minute intraday chart of the past fiveOPEN trading sessions (Wed, Thurs, Fri, Wed, Today) as notice how choppy price has been…. It’s shaking traders up who do not know how to adjust their trading strategy during rising volatility and mixed market cycles. This is something I will be teaching in the near future using my own eSignal trading indicators and Signals as it has been CRUCIAL in the past 3 year to profit from and minimize losses.



Daily Chart of my Cycles & Sentiment Indicator of the SPY:




Precious metals are not participating today and even gold stocks are trading lower… Seems people are really focused on pure risk on (equities) today.

Yesterday we saw utilities rally as fear worked its way into the market. Well today utilities (XLU) is trading lower. Interesting how the market move and why I love them so much…

Last week I mention how RIMM looked ready for a major breakout and rally. This week it has jumped over 12% which is exciting. The next to pop looks like KOL coal ETF.

Get my Daily Trading Analysis & Trade Setups at The Gold & Oil Guy.com

Chris Vermeulen



Chris Vermeulen is Founder of the popular trading analysis website The Gold & Oil Guy.com. There he shares his highly successful, low risk trade ideas. Since 2001 Chris has been a leader in teaching others to skillfully trade Currencies, Stock Indices, Bonds, Metals, Energies, Commodities, and Exchange Traded Funds.

Don't miss our WTI Crude Oil & Oil Stocks Seasonality & Year End Outlook

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WTI Crude Oil & Oil Stocks Seasonality & Year-End Outlook

By: Chris Vermeulen – The Gold & Oil Guy.com.....

Crude oil has had some large price swings this year and another one may be on its way. This report shows the seasonality of crude oil along with where oil is trading and what the oil service stocks are telling us is likely to happen going into year end.

Since WTI Crude Oil topped out in September at the $100 resistance level (Century Number) many traders are looking for a bounce or bottom to form in the next week. Historical charts show that on average the price of oil falls during November and the first half of December.

The charts of oil and oil stocks shown below have formed patterns on both time frames (weekly & daily) that lower prices are to be expected. If you did not read my Gold Seasonality Report I just posted be sure to review it here: Gold Seasonal Report


  
WTI Crude Oil Weekly Chart:
Here you can see that price tends to fall going into Christmas and rallies during the last week of trading. This price action falls in line with Dimitri Specks seasonal chart providing us with insight as to what we should expect. Later this week I will finish my report on the Election Cycle Seasonality report which shows weakness in the market during Oct & Nov when a president is up for re-election.



Oil Services Stocks – Weekly Chart: 
If you follow oil closely then you know likely know already that oil related stocks can lead the price of oil by a couple weeks. What this means is that if big money is flowing into oil stocks (bullish price patterns with strong volume), then you should expect the price of crude oil to rise in the coming days. That said, if money is flowing OUT of oils stocks then lower or sideways oil price should be expected.

The weekly chart oil stocks show a very large bearish head & shoulders pattern. While I do not think the neckline will be broken it is very possible.

One of the most important pieces of data on the chart is the VOLUME. Notice the lack of it… Volume tells us how much interest and power is behind chart patterns and declining volume clearly tells us these investments are out of favor currently and that big money is not moving into them.



Oil Services Stocks – DAILY Chart: 
Zooming into the daily chart of the oil service stocks we can see there is yet another bearish pattern unfolding. Another head & shoulders pattern which looks as though it is just starting to breakdown as of this writing. Next support level is $35-36.



WTI Crude Oil and Oil Service Stocks Trading Conclusion:
Looking forward 1-2 months (November – December) taking the seasonal price swings in oil, re-election cycle seasonality and price action of oil stocks I feel oil will trade sideways or down from here. With that being said, expect crude oil to rally during the last week of the year. I hope this provides some useful info for your trading!

Get my Daily Trading Analysis & Trade Setups at The Gold & Oil Guy.com


Chris Vermeulen is Founder of the popular trading analysis website The Gold & Oil Guy.com. There he shares his highly successful, low risk trade ideas. Since 2001 Chris has been a leader in teaching others to skillfully trade Currencies, Stock Indices, Bonds, Metals, Energies, Commodities, and Exchange Traded Funds.

Is Santa Coming Early for Gold & Gold Mining Stocks?

By: Chris Vermeulen at The Gold & Oil Guy.com

If you own physical gold, gold mining stocks or plan on buying anything related to precious metals before year end, you are likely going to get excited because of what my analysis and outlook shows.

Since gold topped abruptly a year ago (Sept 2011) with a massive wave of selling which sent the price of gold from $1920 down to $1535, technical analysts knew that type of damage which had be done to the chart pattern could take a year or more to stabilize before gold would be able to continue higher.

Fast forwarding twelve months to today (Oct 2012). You can see that gold looks to have stabilized and is building a basing pattern (launch pad) for another major rally. The charts illustrated below show my big picture analysis, thoughts and investment idea.

Weekly Spot Gold Chart:
The weekly chart can be a very powerful tool for understanding the overall trend. This chart clearly shows the last major correction and basing pattern in gold back in 2008 – 2009. Right now gold looks to be forming a very similar pattern.

Keep in mind this is a weekly chart and if you compare the 2009 basing pattern to where we are today I still feel it could take 3 – 6 months before gold truly breaks out to the upside and kicks into high gear. The point of this chart is to provide a rough guide for what to expect in the coming weeks and months.




Weekly Chart of Junior Gold Miner Stocks:
If you follow gold closely then you likely already know junior gold mining stocks can lead the price of gold up to two weeks. Meaning gold mining stocks which you can track by looking at GDX and GDXJ exchange traded funds will form strong bullish chart patterns and generally start moving up in price before physical gold.

The chart below shows the junior gold miner ETF with a VERY BULLISH chart and volume pattern. Remember that gold stocks are a leveraged play on gold in most cases. For example, if gold moves up 1% we typically see GDX and GDXJ move 2-4%. Because they act as a leveraged play on physical gold smart money and big institutions start accumulating these investments in anticipation of gold rising.

GDXJ has formed a tight bull flag and the volume levels confirm there is big money moving into these investments. The first price target on GDXJ using technical analysis for a measured move points to the $32 area. Looking forward twelve months with gold trading above $2000 we could see this fund more than double in value.

Bonus: while most traders focus on GDX gold miner fund, I prefer the GDXJ fund because its almost identical in price performance BUT it pays you a 5% dividend....




Gold’s Seasonality: 
It’s that time of year again where gold tends to move higher. Below you can see where we are and what the price of gold typically does in November.




Gold Investing & Trading Conclusion:
Looking forward one month (November) and factoring in the recent pullback in gold to known support levels along with strong buying of junior gold mining stocks, I feel gold will take another run at the $1800 level and for GDXJ to test its previous higher of $25.50 at minimum. If both those levels get taken out then a massive bull market for precious metals could be triggered. Only time will tell.

Get my Daily Trading Analysis & Trade Setups at The Gold & Oil Guy.com

Chris Vermeulen

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Cold Snap Expected to Boost Heating Demand....Natural Gas Prices Jump to 11 Month High

Benchmark U.S. natural gas prices rose sharply over the past week, touching the highest levels in nearly 11 months, on expectations colder weather will stoke heating demand, the Energy Information Administration said.

Henry Hub gas as of October 24 was $3.43 per million British thermal units, up 19 cents from a week earlier. Prices at many trading points rose on "news of a coming cold snap," the EIA said. On October 22, Henry Hub gas hit $3.49, the highest since late November.

In NYMEX futures trading October 25, November gas fell 1.6 cents to $3.434, down 5.1% from $3.617 at the end of last week and the lowest settlement in nearly three weeks.

Gas prices were up even as above average temperatures in much of the U.S. tempered consumption. During the week ended October 24, total U.S. gas demand fell 2.9% from the previous week, led by a drop of 4.8% in residential and commercial use, with temperatures averaging about 1 degree Fahrenheit above normal.

Working natural gas in underground storage increased to 3.843 trillion cubic feet as of October 19, an implied net injection of 67 billion cubic feet from the previous week, 4.1% over year ago levels and 7% over the five-year average for that date.

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Commodities Next Week: Hurricane Sandy & Gas Prices

CNBC's Bertha Coombs discusses Friday's activity in the commodities markets and looks ahead to where oil and precious metals are likely headed next week.



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ONG: Crude Oil Prices Recover as Hurricane Sandy Approaches Northeast U.S.

Commodity prices recovered after days of losses. Crude oil prices gained modestly after news reported that Hurricane Sandy headed for the US after impacting Cuba and UK’s GDP turned out better than expected. Meanwhile, sentiment was also lifted as US’ initial jobless claim fell more than consensus, signaling improvement in the employment market. The front month contract for WTI crude oil added +0.37% while the equivalent Brent crude contract climbed +0.59%. Gold also rebounded despite slippage of the euro with the benchmark Comex contract gaining +0.67%.

The US East Coast is threatened by Hurricane Sandy which already killed 21 people across the Caribbean. Meteorologist said that the hurricane would probably grow into a "Frankenstorm" and give the Northeast US the worst hit in 100 years. The market worried that the storm might strengthen further and hurt supply of the gasoline and distillate market. Yet, this might not be able to support for too long as Wednesday’s report showed that oil inventories remained abundant.

In the UK, GDP surprisingly rose +1.0% q/q in 3Q12, following a -0.4% contraction a quarter ago. This was higher than the market forecast of a modest gain of +0.6% and marked the strongest gain since the financial crisis in 2007. In the Eurozone, ECB reported that lending to the private sector fell -0.8% from the same period a year ago. This was the 5th consecutive decline and the steepest since October 2009. As the economy is expected to remain weak for the rest of the year, lending growth is expected to contract further.

In the US, initial jobless claims fell -23K to 369K in the week ended October 20. The 4 week average, however, climbed +2K to 368K as the data in the previous week was revised by +4K to 392K. Continuous claims slipped -2K in the week ended October 13. Durable goods orders soared +9.9% in September, following a -13.2% contraction a month ago. Excluding transportation, the reading gained +2% in September after slipping -1.6% in the prior month. The US GDP probably gained +1.8% in 3Q12, up from +1.3% gain in the second quarter. Meanwhile, the University of Michigan confidence data might be revised down to 83 in October from the flash reading of 83.1.

Posted courtesy of Oil N'Gold.com

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Seadrill SDRL Reaches 64.23% Ownership in Asia Offshore Drilling

After close of trading on Oslo Børs on 25 October 2012 Seadrill Limited ("Seadrill") has acquired 12,190,858 shares of Asia Offshore Drilling Limited (the "Company", OSE: AOD). The shares were acquired at a price of US$5.0 per share (equals NOK28.71 based on the USD/NOK exchange rate set by the Norwegian Central Bank on 25 October).

Following this acquisition, Seadrill will be the owner of 25,690,958 shares in the Company, corresponding to 64.23% of the total number of outstanding shares in the Company. As a consequence, Seadrill will proceed with the launch of a mandatory cash offer for the remaining shares in the Company. Such mandatory offer will be launched as soon as practicably possible, within the time limits set out in chapter 6 of the Norwegian Securities Trading Act.

RS Platou Markets AS act as financial advisor to Seadrill in connection with the offer.


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ConocoPhillips Reports Third Quarter Earnings

ConocoPhillips (COP) today reported third quarter 2012 earnings of $1.8 billion, or $1.46 per share, compared with third quarter 2011 earnings of $2.6 billion, or $1.91 per share.

Excluding special items of $26 million, third-quarter 2012 adjusted earnings were $1.8 billion, or $1.44 per share, compared with third quarter 2011 adjusted earnings of $1.9 billion, or $1.40 per share. Special items for the current quarter were primarily related to net gains on asset sales offset by the impact of tax law changes in the United Kingdom and pension settlement expense.

Highlights

* Quarterly production of 1.525 million BOE per day.
* Continued ramp up in Eagle Ford and Bakken.
* Ongoing growth from Canadian oil sands and successful startup of Christina Lake Phase D.
* Major projects and drilling programs on schedule to deliver volume and margin growth.
* Completed turnarounds at major worldwide facilities, as planned.
* Ramping up exploration activity in conventional and unconventional opportunities globally.
* Completed sale of NMNG and dilution of interest in APLNG.

“We performed well in our first full quarter as an independent E&P company,” said Ryan Lance, chairman and chief executive officer. “Our production was on target, our growth projects and drilling programs are on track and our portfolio optimization plans continue to progress. Quarterly production, excluding the impact of dispositions, grew by 40 thousand BOE per day compared to the third quarter of 2011.”

“For the first nine months of 2012, we have generated $2.1 billion in proceeds from asset dispositions and remain on track to complete our $8-$10 billion disposition program by the end of 2013,” Lance added. “We are focused on delivering average annual production growth and margin growth of 3 to 5 percent, improving our financial returns, and offering a sector leading dividend.”

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EIA: Natural Gas Processing Plant Data Now Available

In the wake of Hurricane Katrina in 2005, which severely disrupted natural gas infrastructure in the Gulf Coast region, EIA established a triennial survey of natural gas processing plants (EIA-757) to be used as a baseline for assessing the effect of extreme weather on natural gas processing infrastructure. This past summer, EIA activated the baseline survey (EIA-757, Schedule A), the results of which are published in EIA's Natural Gas Annual Respondent Query System.

The EIA-757 survey has a baseline portion, Schedule A, to track the country's population of natural gas plants, and an emergency activation portion, Schedule B, to provide the operational status of processing plants in an area affected by a supply disruption, usually a natural disaster such as a hurricane. In August, EIA activated Schedule B to track shut in capacity caused by Hurricane Isaac. EIA used the information collected on EIA-757B to provide daily updates to the Department of Energy's Situation Report and to write a brief retrospective for Today in Energy.

 

Data from EIA-757 Schedule A show 517 active natural gas processing plants in the Lower 48 states, with a total processing capacity of 65.5 billion cubic feet per day. Not all processing plants run at full capacity all the time. On average, these plants processed about 44.7 billion cubic feet per day, operating at about 68% of capacity. Plants operate at less than capacity for many reasons: transportation constraints, varying input supplied from wells, and regional economics.

Processing plants are midstream facilities that separate natural gas liquids (NGL) from natural gas. Gas processing plants often perform several other functions, as well: dehydration, contaminant removal, and sometimes fractionation (separating an NGL stream into its component products). This survey is not a complete picture of processing capabilities, nor does it represent all processing plants that touch natural gas before it becomes pipeline-quality gas. At the well site, some upstream field processing may be done to remove condensate before gas is sent to a midstream processing plant for NGL extraction. In addition, gas producers may use dehydration units (to remove water) and amine treaters (to remove hydrogen sulfide and carbon dioxide).

Downstream from natural gas processing plants, the combined NGL stream is often broken into separate NGL products (ethane, propane, butane, iso-butane, pentane) by a fractionator. Sometimes straddle plants located on large pipelines will extract small quantities of NGL that remain in the stream even after processing. Similarly, newer, more efficient cryogenic plants may also sit downstream of other processing plants to strip out lighter NGLs that are left in the gas stream for technological or economic reasons. Most storage facilities also have some processing capabilities to dehydrate gas that is withdrawn from storage. When pipeline-quality natural gas is injected into storage, it mingles with other hydrocarbons or water, which must be removed before the gas can be reintroduced into the pipeline grid.

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National Oilwell Varco NOV Announces Third Quarter 2012 Results

National Oilwell Varco (NOV) today reported that for the third quarter ended September 30, 2012 it earned net income of $612 million, or $1.43 per fully diluted share, compared to second quarter ended June 30, 2012 net income of $605 million, or $1.42 per fully diluted share. Earnings per share increased 14 percent compared to the third quarter 2011 earnings of $1.25 per fully diluted share.

Transaction charges for the third quarter of 2012 were $57 million pre tax. Net income for the third quarter of 2012 excluding transaction charges was $650 million, or $1.52 per fully diluted share. This compares to second quarter of 2012 net income of $626 million, or $1.46 per fully diluted share, and third quarter 2011 net income of $536 million or $1.26 per fully diluted share, excluding transaction charges from all periods.

The Company’s revenues for the third quarter of 2012 were $5.3 billion, an increase of 12 percent from the second quarter of 2012 and an increase of 42 percent from the third quarter of 2011. Operating profit for the third quarter of 2012 was $946 million or 17.8 percent of sales, excluding transaction charges. Sequentially, third quarter operating profit increased four percent, resulting in operating profit flow through (change in operating profit divided by the change in revenue) of seven percent, excluding transaction charges. Year over year third quarter operating profit increased 22 percent, resulting in operating profit flow through of 11 percent, excluding transaction charges.

During the third quarter of 2012 the Company’s Rig Technology segment booked $2.29 billion in new orders. Backlog for capital equipment orders for the Company’s Rig Technology segment at September 30, 2012 was $11.66 billion, up three percent from the end of the second quarter of 2012.

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