Crude Oil

[setravis]

Crude Oil...

Crude rallied off the rising trendline and is headed for another test of $83/barrel. Twiggs Momentum (63-day) oscillating in a narrow band around zero reflects a ranging market, between $70 and $83, that is likely to continue for some time.

[setravis]

Crude Oil...

Crude broke resistance at $78/barrel and is now retracing to test the new support level. Respect would signal a rally to $83. The longer-term picture remains dull, however, with Twiggs Momentum (63-day) oscillating in a narrow band around zero. Expect a ranging market, between $70 and $83, to continue for some time.

[setravis]

Crude Oil...
Crude is consolidating below $80/barrel. Reversal below the new support level at $78/barrel would warn of another correction, while respect would indicate a test of $83. The longer-term picture remains dull with Twiggs Momentum (63-day) oscillating in a narrow band around zero. The ranging market, between $70 and $83, may continue for some time.

[setravis]

Crude Oil...
Crude is consolidating between $78 and $80 per barrel. The narrow rectangle favors continuation of the rally — confirmed if there is a breakout above $80. Reversal below is unlikely, but would warn of another correction. The longer-term picture remains dull with Twiggs Momentum (63-day) oscillating in a narrow band around zero. The ranging market, between $70 and $83, may continue for some time.

[setravis]

Crude Oil...

Crude respected the new support level at $83 per barrel, signaling a test of the 2010 high at $90. Twiggs Momentum (63-day) holding outside its former range confirms the new up-trend.

[setravis]

Tuesday, Oct. 26, 2010
Oil prices hesitate on stronger dollar, economy...

NEW YORK (AP) — Oil prices moved between small losses and small gains on Tuesday, as the dollar got a little stronger and stocks wavered after disappointing earnings reports and lower home prices. Benchmark crude for December delivery rose 15 cents to $82.67 a barrel on the New York Mercantile Exchange.

Gas pump prices drifted lower, with the national average for a gallon of regular at $2.81, according to AAA, Wright Express and Oil Price Information Service. That's almost two cents lower than a week ago and 14 cents higher than a year ago.

Slight gains by the dollar against the euro made crude priced in dollars more expensive for investors holding other currencies.

"It seems that the U.S. dollar continues to be strongly correlated with the oil market, as the recent U.S. dollar weakness has helped oil prices to remain fairly strong above $80 per barrel area, amid these fragile economic conditions," said analysts at Sucden Financial in London.

Stock markets were lower in late-morning trading. A surprise loss at US Steel for the third quarter and concern about weak demand for steel used in cars, appliances and housing drove down steelmaker shares.

The housing market remains anemic in most parts of the country. Home prices fell in 15 of 20 cities measured in the Standard & Poor's/Case-Shiller index for August. Consumer confidence in the economy improved a bit this month from September, but remained weak.

The Energy Department releases its weekly reading on petroleum inventories on Wednesday. In a note to investors, energy consultants MF Global said an expected rise in stockpile levels because of slowing fuel demand is putting downward pressure on prices.

Analysts think crude inventories grew by 1.5 million barrels last week, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. Gasoline and distillate stocks--diesel and heating oil--are also expected to rise.

"While the numbers could bring some surprises this week, one week's report will not change a continued bearish supply-usage situation as large supply surpluses will remain intact," energy consultants Ritterbusch and Associates said in a report.

Crude will likely hover above $80 at least until the Federal Reserve says what measures it will take to spur U.S. economic growth at its meeting on Nov. 2 and 3.

"Energy futures could continue to chop sideways through the rest of this week as both the bulls and the bears are apt to exercise caution ahead of next week's Fed meeting," Ritterbusch said.

In other Nymex trading in November contracts, heating oil was unchanged at $2.2550 a gallon and gasoline gained 1.03 cents at $2.0867 a gallon. Natural gas gained 7.8 cents at $3.395 per 1,000 cubic feet.

In London, Brent crude rose 13 cents to $83.67 a barrel on the ICE Futures exchange.

[setravis]

Crude Surge...

The Energy Report for Thursday, October 28, 2010

Crude Surge! Let's forget all that quantitative easing stuff for a moment and focus on some of that old time supply and demand stuff. The Energy Information Agency reported that crude oil supplies hit the highest level ever, in this county, for this time of year. Well at least since the EIA has been tracking monthly data.

After a whopper build of 5.0 million barrels, we see supply hit a hefty 366.2 million barrels which according to Dow Jones newswires is the highest level of supply at this time of year since 1931. To put that in perspective, that was a year when the "Model A" was the car of choice for many Americans and Herbert Hoover was President. Of course this bounty of crude supply did not translate to gasoline supply which according to the EIA fell 4. 4 million barrels last week and probably kept the entire petroleum complex from falling totally apart.

Gas exports were a contributing factor as the strike in France created an increased demand for our supply. Gasoline production increased last week, averaging 9.2 million barrels per day while imports a mere 1.0 million barrels per day. Over the last four weeks, motor gasoline demand has averaged 9.0 million barrels per day, down by 0.8 percent from the same period last year.

Distillates, according the EIA, fell by 1.6 million barrels. If the French had not been siphoning off supply, that number might have been larger. The impact of the strike influenced our demand numbers which averaged 3.9 million barrels per day over the last four weeks, up by 8.7 percent from the same period last year. Distillate fuel demand has averaged 3.9 million barrels per day over the last four weeks, up by 8.7 percent from the same period last year.

The EIA reported that refineries operated at 83.7 percent of their operable capacity last week and over all oil use hit the lowest level since December. Demand is still weak over all and may be restricted somewhat by the price spike caused by the QE2 threat!  With oil trading in a tight trading range for the majority of this year it is time to get my daily buy and sell points. Just call me at 800-935-6487 or email me at [email protected]. And see me every day on the Fox Business Network!



There is a substantial risk of loss in trading futures and options.Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. PFGBEST, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

[setravis]

Commodity Technicals: CRUDE OIL...

CRUDE OIL: Continues To Consolidate.


CRUDE OIL: Our outlook on Crude Oil remains that of consolidation with upside bias. It was seen wiping out its Monday and Tuesday gains in today's trading session. However, while that is limited to the 79.90 level more consolidation is likely. Having said that, the commodity requires a break out either way from its range(79.90 and 84.40) to create directional moves.  Resistance lies at the 82.95 level where a break will aim at its Oct 07'2010 high located at 84.40 and then the 87.22 level, its 2010 high. A violation of the latter will resume its long term uptrend towards the 90.00 level, its psycho level and then the 92.00 level. Conversely, further corrective weakness if seen will aim at the 80.29 level with a cut through there turning attention to the 78.01 level. We look for this level to reverse roles and provide support if tested. All in all, Crude Oil continues to consolidate but still retains its overall bullish medium term uptrend.

[setravis]

Trade Recommendations for Wed. Oct. 27th...

Tomorrow we have mortgage apps, durable orders, new home sales, and crude inventories to spice things up.  API reported a build of 6.4 million barrels today compared to the 1.5 analysts were expecting.  Although API is unreliable for the most part, it just reminds us how easily we can get a surprise report on a weekly basis.  The current strength in the dollar is putting pressure on commodity prices amidst mixed economic data.  Case Schiller was down 0.3% where we had the initial negative reaction, and then consumer confidence rose more than expected which justified the support most of the day.  Most markets had inside days, but the market to keep an eye on is treasuries.  Todays test of lower support coincides with treasuries jumping the gun after a strong 2yr note sale, as I would anticipate higher treasuries into the FOMC announcement, and a quick reversal in the days to come.  As QE2 is around the corner, we have some position squaring ahead of the news next week, which will be the catalyst to continue the current trends.  The question is how much more can we try and lift the dollar, inversely pushing down on the euro over the next few sessions.  We've hit the 76% retracement level on the Euro at 1.38, barring a breach of the previous low at 1.3690, we still have a chance to take out the recent highs.  If we do indeed continue to retrace, then we're looking at an initial target of 1.3555.

1)  Hold Dec. Emini S&P longs, with a 1172 stop.  Exit 1196.

2)  Hold Dec. Crude oil longs, with a 81.27 stop.  Exit 83.70.

3)  Wait for additional comments on the Euro.  If the market doesn't weaken further overnight, we may possibly consider purchasing using a 1.3760 stop.

[setravis]

Crude Oil...

Crude retraced to test medium-term support at $82 per barrel. The flag formation favors continuation of the up-trend. Expect a test of the 2010 high at $90. Twiggs Momentum (21-day) respecting the zero line would confirm the primary up-trend.

[setravis]

Crude Oil...

Nymex WTI Crude is headed for a test of resistance at $87 per barrel. Breakout would offer a target of $107*. A Twiggs Momentum (21-day) trough that respects the zero line would confirm the primary up-trend.

Target calculation: 87 + ( 87 - 67 ) = 107

[setravis]

Wednesday, November 10, 2010...

•   December crude oil prices this morning are trading -27 cents a barrel and December gasoline is -0.15 of a cent per gallon. Crude oil and gasoline prices yesterday erased an early rally after the dollar rebounded and they finished the day mixed: CLZ10 -$0.34, RBZ10 +0.650. Dec crude rallied to a 25-month high and Dec gasoline posted a 1-month high.

Bearish factors included (1) the rally in the dollar index to a 1-week high, and (2) the outlook for US crude oil inventories to increase to their highest level in 18 months when the DOE releases its weekly inventory report on Wed.

Bullish factors included (1) early weakness in the dollar which boosted investment demand for crude oil and its products, and (2) comments from Qatari Oil Minister Abdullah al-Attiyah who said that the world will "have to live with current oil prices," which suggests the erosion of the dollar may prompt OPEC to seek a higher price range for oil. Expectations for Wednesday's weekly inv entory report from the DOE are for crude oil supplies to increase +1.2 million bbl, gasoline inventories to fall -1.0 million bbl, distillate stockpiles to decline -2.0 million bbl and the refinery capacity rate to increase +0.1 to 81.9%.

[setravis]

Thursday, November 11, 2010...

•   December crude oil prices this morning are trading +46 cents a barrel and December gasoline is +0.43 of a cent per gallon. Crude oil surged to a 25-month high in overnight trade after Moody's Investors Service raised China's debt rating, which spurred a rally in most commodities on optimism that demand and the economic recovery will continue. Crude oil and gasoline prices yesterday moved higher after an unexpected drop in crude inventories and then shed some of their advance as the dollar rallied but still finished higher: CLZ10 +$1.09, RBZ10 +5.120. Dec crude rallied to a 25-month high and Dec gasoline posted a 6-month high.
                Bullish factors included (1) the unexpected drop in weekly crude oil inventories (-3.27 million bbl versus expectations of +1.3 million bbl), (2) the larger-than-expected declines in weekly gasoline and distillate inventories (gasoline -1.92 million bbl versus expectations of -1.0 million bbl and distillates -4.97 million bbl versus expectation s of -2.0 million bbl), and (3) the prediction from Goldman Sachs that oil prices will be "substantially" higher by 2012 as the global surplus shrinks and excess production capacity drops.
                Bearish factors included (1) the rally in the dollar index to a 2-week high, (2) reduced demand by China after Oct China crude oil imports fell to 16.1 MMT, or 3.8 million bpd, down -29.6% m/m and -15% y/y to their lowest level in 18 months, and (3) the larger-than-expected increase in the refinery capacity rate, +0.6 to 82.4% versus expectations of +0.1 to 81.9%, which bodes well for further increases in crude products in the weeks ahead.

[setravis]

Friday, November 12, 2010...

•   December crude oil prices this morning are trading sharply lower by -$1.76 a barrel and December gasoline is -3.12 cents per gallon. Most commodity prices tumbled in overnight trade on concern that further Chinese rate hikes will slow economic growth and demand for commodities. Crude oil and gasoline prices yesterday rallied early but shed their gains after the stock market weakened and the dollar strengthened and they finally finished unchanged to slightly lower: CLZ10 +$0.00, RBZ10 -0.005. Dec crude rallied to a 25-month high and Dec gasoline posted a 6-month high.
                Bullish factors included (1) the action by Moody's Investors Service to raise China's debt rating, which spurred a rally in most commodities on optimism that the global economic recovery and strong energy demand will continue, (2) the action by OPEC to raise its 2011 global oil demand forecast by 1.2 million bpd to 86.95 million bpd, up +120,000 bpd from last month's forecast, and (3) the +12% y/y incre ase in Oct China crude processing as Chinese refiners processed a record 37 million metric tons, or 8.8 million barrels a day of crude in Oct, a sign of strong demand.
                Bearish factors included (1) the rally in the dollar index to a 2-week high, (2) the retreat in stock prices, which dampens confidence in the economic outlook and fuel demand, and (3) the drop in compliance by OPEC members on their production quotas in Oct to 51% from 55% in Sep as rising oil prices prompted cartel members to cheat on their quotas and overproduce.

[setravis]

Crude Oil...

Nymex WTI Crude broke through resistance at $86/$87 per barrel, offering a target of $107*. A Twiggs Momentum (21-day) trough above the zero line confirms the strong up-trend.

* Target calculation: 87 + ( 87 - 67 ) = 107