This is today`s word on the trading desks. Traders think oil futures are forming a short term trading range."Crude-oil markets still seem to be trapped within a trading range, as market anticipation about OPEC cuts -- both current and pending-- is keeping something of a floor below prices, while the upside is capped by lingering concerns over the macro situation" Edward Meir, an analyst at MF Global“Oil traders are likely to wait for non-farm...
OPEC may Cut Further on March 15
Saturday, October 10, 2009
OPEC may cut its production further at the next meeting being held on March 15.Former OPEC President Chakib Khelil said that if present output cuts don’t result in higher oil prices OPEC must cut production again.The OPEC countries need crude oil prices above 70 a barrel to invest and develop new oilfields, Khelil said tod...
Trading Maxim
Saturday, October 10, 2009
This is one of the best quotes I have ever read about trading:"There is no such thing as being right or beating the market. If you make money, is because you understood the same thing the market did. If you lose money, it is simply because you got it wrong. There is no other way of looking at it"I think this is an useful piece for every trader out the...
Is OPEC cutting Production?
Saturday, October 10, 2009
OPEC production averaged 28565 mln barrels/day in January, down 3.5% from December (Bloomberg News). “Compliance by OPEC is better than in the past” said Sinte Diek, an analyst at HSH Nordbank in Hamburg, Germany. Current oil prices “are really disturbing the budget deficits,” of many OPEC member countries.Crude oil was gaining 2%, to 40.87 a barrel in after-hours NYMEX Futures Trading. Oil is down 9.1% year to date and down 55% from last...
Speculators Increased Their Long Positions
Saturday, October 10, 2009
Hedge-fund managers and other large speculators increased their net-long position in NYMEX OIL futures last week, according to U.S. Commodity Futures Trading Commission. Speculative long positions outnumbered short positions by 51,652 contracts on the NYMEX, the Commitments of Traders report showed. Net-long positions rose by 5518 contracts, or 12%, from last week. Today all risky assets are being sold again, and within this context we...
Martin King thinks Bottom is In
Saturday, October 10, 2009
The “stability for now, upside later” argument for crude oil prices appears to be holding true for now. Oil prices have done little to set any directional bias so far in 2009. But one thing FirstEnergy Capital analyst Martin King says he is sure of that his call for the bottom in oil prices around mid-December remains correct.Is this as good of a call as Art Hogan`s Dow Bottom?Martin King`s BioVice President, Institutional Research, First...
Is Oil Oversold?
Saturday, October 10, 2009

In this charts (Oil, Natural Gas and Gold), the green zone represents prices between 2 standard deviations above and below the 50 day moving average. When prices approach or move above or below the trading range are considered overbought or oversold:Font: Bespoke Investment GroupOil and Natural Gas are almost in the Oversold area while Gold is approaching Overbought."There...
United States Oil Fund: Contango Effects Explained
Saturday, October 10, 2009
I found this very useful text about the United Staes Oil Fund (USO) and the full implications that a contango market has on its performance. THe original tesxt can be found in Seeking Alpha, and I posted only the most interesting parts: "The US Oil Fund holds long positions in West Texas Intermediate crude oil futures contracts, and rolls these contracts forward each month. Like most futures traders, USO buys futures with leverage, putting...
Contango Narrows. Now What?
Saturday, October 10, 2009
Inventories Out TodayThe Energy Department report later today will probably show that crude oil inventories rose for a 16th time in 18 weeks, increasing 2.8 million barrels in the week ended January 23.Contango NarrowsThe price of oil for delivery next December is 29% higher than for the february month, narrowing from 35% on January 16. The contango in the oil market is narrowing and Jonathan Kornafel, a director for Asia at options trader...
Gulf Oil CEO Bearish on Oil Prices
Saturday, October 10, 2009
GULF OIL CEO VIDEO INTERVIEWGULF OIL CEO Quotes,"We will see much lower prices in oil" "Oil nations will sell more on oil decline not less""25 dollar a barrel oil is in the cards"When trading oil, always look to trade in the cheapest way possible. If you trade oil ETF`s like USO, DBO, OIL or DXO or if you trade NYMEX Oil Futures be aware of high comissions. High comissions completely destroy your winning capabilities as a trad...
Obama Plan for Oil Independence
Saturday, October 10, 2009
US president, Barack Obama, has announced the first steps of a plan to make the USA energy independent. The plan includes the use of green energy and stricter fuel-efficiency targets for vehicles to reduce dependence on foreign oil.The energy plan includes a 35 mile per gallon fleet-average fuel economy mandate which must be met by all manufacturers by 2020, with new tighter standards introduced from 2011.“We must ensure that the fuel-efficient...
Oil Fund Manager sees 60 Dollar Oil in 2010, 70 in 2011
Saturday, October 10, 2009
In this week`s Cover, Barron's highlights several oil giants worth thinking about including XOM, TOT, BP and PBR:1) ExxonMobil (XOM) is the priciest of this list but, cash-rich, is also the most likely to raise its dividend. It has low reserve-replacement costs and a sharp, conservative management team. Its shares have been the most stable of the big energy firms, losing just 6% over the past 12 months. Speculation has been growing as to...
Eni CEO talks about the Oil Market
Saturday, October 10, 2009
Eni SpA CEO said Sunday that the turbulence in oil prices is unprecedented and is "extremely bad news" for the industry.Paolo Scaroni spoke at the Global Competitiveness Forum, "Our sector is no stranger to cycles", "But the turbulence we are currently experiencing — with oil doubling in the nine months to July 2008 and then losing two-thirds of its value in the following six months — is unprecedented.""It is also extremely bad news for...
How are Oil ETF`s Performing
Saturday, October 10, 2009
How are Oil ETF`s performing year to date? The performance is actually quite different, with the leveraged DXO performing better than its peers. DBO is up 1.75% for the year, while OIL ETF is down 7.7%. The most traded oil ETF, the USO tracking ETF is down 2.3% for the year. The difference is probably on how they have managed this supercontango in the crude oil futures. USO ETF: -2.3%United States Oil Fund, LP (USOF) is a domestic exchange...
Schlumberger CEO Talks About Oil
Saturday, October 10, 2009
Schlumberger CEO commented about the weakening state of the global oil and natural gas industry, reporting a lower fourth-quarter profit, additional layoffs and a glum forecast for the rest of 2009.“The biggest difference I see from both the mid-'80s as well as ’97, ’98, is the speed with which everybody is reacting,” Schlumberger CEO commented during a conference call. “These cycles are getting much sharper in their amplitude and shorter...
Upward Pressure on Oil Prices
Saturday, October 10, 2009
"Oil prices settled higher Friday as a late session rally, sparked by rebounding equities, capped a volatile trading day. Oil ended the session up 2.80 to settle at $46.47 a barrel. Earlier in the session crude had traded as low as 41.40 a barrel."in CNN MoneyAll commodities traded higher today, despite the dollar strength. Th line of least resistance (as Jesse Livermore used to say) in the oil futures markets is changing from downward...
US Fuel Comsuption Down 4.7% YoY
Saturday, October 10, 2009
U.S. fuel consumption during the four weeks ended Jan. 16 averaged 19.4 million barrels a day, down 4.7 percent from a year earlier, the Energy Department report showed.Actually this is not a huge drop. As I said in the last few days I think a new uptrend in oil is in place and Russian stocks which are down sharply in the last few months will greatly benefit if oil keeps rising. Might be a very good way to play the rise in oil, besides...
Inventories Out Today
Saturday, October 10, 2009
Oil futures were declining early Thursday, ahead of the inventories, weighed down by expectations of a build in crude supplies and gloomy economic data from China and the United States.Crude oil for March delivery dropped $1.70, or 3.8%, to $41.88 a barrel in electronic trading on Globex. "On the demand side, the markets received more evidence of the extent of the global economic weakness," said Nimit Khamar, an analyst at Sucden Financial...
Oil Reverses Trend
Saturday, October 10, 2009
Crude oil prices recovered Tuesday, after falling to their lowest level in more than a month, amid volatility on the last day of trading for the current active contract. U.S. crude for February delivery ended the day in the black, rising $2.23, or 6.1%, to $38.74 a barrel in New York.Prices recovered after plummeting by as much as 10% to $32.70 earlier, the lowest level for crude since Dec. 19, as the dollar soared against the pound and...
Oil: Where to?
Saturday, October 10, 2009
What`s moving Oil today?* Oil down around 1 percent in thin trading on U.S. holiday* Falling oil demand increasingly expected* Gaza ceasefire and end of Russian gas row add to downsideI am expecting as huge rebound in the next few weeks, probably starting tomorrow. Improving equity markets, ultra low interest rates and 5 year lows on the commodity added to the Obama effect should move risky assets up, including OIL.When trading oil futures...
Oil Keeps Falling, Retesting the Lows
Saturday, October 10, 2009
Crude traded little changed, set for the biggest weekly decline in a month, after the International Energy Agency said demand will fall for a second year, the first back-to-back contraction since 1983.The adviser to 28 nations cut its 2009 forecast by 1 million barrels a day on expectations the International Monetary Fund will lower its economic growth outlook. The IEA estimates global consumption will shrink 0.6 percent to 85.3 million...
EIA Lowers Oil Demand Projections
Saturday, October 10, 2009
The EIA lowered today its 2009 world oil demand forecast due to the global economic weakness, but predicted a slight recovery in consumption for 2010.World oil demand will drop by 810000 barrels per day in 2009 compared with last year, down 200,000 barrels per day from its estimate last month."World oil consumption continues to be revised downward in response to the global economic downturn," the EIA said in its monthly short-term energy...
Pickens Predicts 140 Dollar Oil when Global Economy Recovers
Saturday, October 10, 2009
Billionaire oil tycoon Boone Pickens, chairman of BP Capital, predicts oil will reach $75 a barrel within a year and go back up to $140 a barrel when the global economy turns around.Pickens told CNBC importing 70 percent of our oil poses a significant threat to the U.S. economy, and he expects energy independence has a better chance under the Obama administration.Pickens is taking his renewable energy plan—the "Pickens Plan"—back to Capitol...
Saudis May cut Production Below OPEC Target
Saturday, October 10, 2009
Top exporter Saudi Arabia plans to cut oil output by up to 300,000 barrels per day below its agreed OPEC target – a pro-active step to prop up a collapsing market, industry sources said on Sunday.OPEC's most influential member has lowered supply this month to 8 million bpd, meeting its target under OPEC's pact to reduce overall production by a record amount from Jan. 1.But strict Saudi discipline has failed to boost oil prices – which at...
Pickens sees 100 Dollar Oil in 2010
Saturday, October 10, 2009
T. Boone Pickens said this week that oil prices will rise above 100 a barrel by the end of 2010 as the global economy recovers."Oil prices in the 40 a barrel range are not going to be around much longer,” Pickens told a gathering at the James A. Baker III Institute for Public Policy at Rice University in Houston.By late 2010, Pickens sees a rebound in oil demand sparked by a global recovery, pushing prices higher. If the U.S. continues...
Oil Below 40
Saturday, October 10, 2009
Crude oil fell below 40 a barrel in New York after a report showing that the U.S. unemployment rate surged to 7.2% in December raising concerns about oil demand going forward.Oil dropped as much as 5% after the government said the country lost 2.589 million jobs last year, the most since 1945. Besides that, U.S. oil supplies have climbed in 13 of the past 15 weeks as the economy slowed, according to the Energy Department. Prices in New...
Bull and Bear Markets in Oil
Saturday, October 10, 2009

Graph with the duration of all bull and bear markets in the crude oil futures since 2000. Great material from Bespoke. And with this fall in prices seen in the last few days we are just short of entering a new bear market. This is investment at the velocity of light. What took 3 months to develop, now happens in 3 days. Pretty amazing. The line of least resistance...
Bearish Crude Report sends Oil Down
Saturday, October 10, 2009
Oil slid more than 9% today after a US government report showed inventories of crude rose more than expected. Crude oil stocks rose by 6.7 million barrels, more than the 900000 barrel increase analysts were expecting. Gasoline and distillate stocks also rose."This is a very bearish report. Crude stocks are up due to higher imports," said Tom Knight, a trader at Truman Arnold in Texas. "The build in products is also bearish."Now the question...
Veteran Oil Trader Says BUY
Saturday, October 10, 2009
Declines like these are opportunities to add to oil positions, says Eric Bolling, a former NYMEX commodity trader and host on Fox Business News. While oil's midsummer rally overshot reality, its subsequent decline was similarly overdone, says the veteran oil trader Bolling, who believes oil should be in the 70 to 85 range.The veteran trader and television commentator is currently long oil via the United States Oil ETF, which he says is...
Crude Inventories Out Later Today
Saturday, October 10, 2009
Crude oil is falling for a second day before a report forecast to show that crude inventories probably increased in the U.S. as its economy contracted. U.S. crude oil stockpiles probably rose for a second week in the week ended January 2, according to a Bloomberg News survey before an Energy Department report today.Oil is falling after a decent rally in the last few sessio...
China Might Add to the Strategic Oil Reserve
Saturday, October 10, 2009
In a rare public statement last week from China's top energy official, Zhang Guobao, head of the National Energy Administration, in the People's Daily newspaper that China should take advantage of the falling global energy demand to increase the strategic oil reserve.This news have been circulating for a while now and might be a major bullish factor going forward. Because of the Middle East chaos and the OPEC's plan to cut production, international...
Forward Curve Showing Higher Prices?
Saturday, October 10, 2009
"The steepest plunge in crude prices on record may be setting up oil investors for a rally this year, if history is any guide. The so-called forward curve of futures contracts traded on the New York Mercantile Exchange suggests oil will rise 28 percent to $60.10 a barrel by December. The curve looks almost the same as 10 years ago, after Russia’s default and the collapse of the Long-Term Capital Management LP hedge fund raised concerns...
Biggest Weekly Gain Since 1986
Saturday, October 10, 2009
Crude oil futures rose the most since 1986 this week, as the conflict in Gaza increased concern that Middle East supplies would be cut and Russia curbed natural- gas shipments to Ukrai...
Retail Investor Oil Consensus
Saturday, October 10, 2009
Retail investors Consensus Oil Price for 2009 is 60 to 70 dollars a barrel and 57% of retail investors predict oil to end 2009 between 50 and 80 dollars a barrel. In the more extreme scenarios, 13% predict oil to end 09 between 10 and 20 dollars a barrel and 16% predict that oil will end 2009 above 90 dollars a barrel. Adding all up, retail investors are just slightly more bullish than institutional investors but the difference is very...
What is the Consensus for 2009?
Saturday, October 10, 2009
The consensus oil price for the end of 2009 are the following:Indeed, much of Wall Street expects oil prices to average about $50 a barrel in 2009. Some of the firms and their specific forecasts include:Deutsche Bank predicts an average price of 47.50 for all of 2009; The chief energy economist of Deutsche Bank, Adam Sieminski, said recently that the demand for oil in 2009 will drop more than any other time in the last quarter of a century,...
Oil Loses 4 Years of Gains in 5 Months
Saturday, October 10, 2009
Oil prices have fallen 70% since hitting a record 147.27 a barrel in July, which means in just five months, crude has given up all the price gains it made in the past four years.That is a true roller coaster ri...
China: Is Adding to the Strategic Oil Reserve
Saturday, October 10, 2009
China plans to use the fall in global energy demand to boost its fledgling oil reserves against future supply shocks, as it speeds up development of nuclear and wind power and cuts reliance on coal, a top energy official said. China was the trigger of the last commodity rally and might very well ignite a decent upsurge on this news. Don`t forget that China will be the world`s biggest economy in 15 or 20 years. Zhang Guobao, head of the...
Oil Rebounds 6.7%
Saturday, October 10, 2009

Crude-oil futures rose Friday for the first time in four days as traders bought the contracts on the heels of their 9.3% slump in the previous session.Crude for February delivery ended up more than two dollars or 6.7%, at $37.71 a barrel on the NYMEx. Even though oil ended the week down 11%. Futures are down more than 60% so far this year, poised for their worst...
Oil At a 4 Year Low
Saturday, October 10, 2009
Today Oil is rebounding from extreme oversold levels Wednesday the crazy ride continued to test new extremes on a shortened trading day as the price fell more than 9% to 35.35 a barrel. This was the its lowest close in more than 4 years. So far, the price of oil has plunged nearly 76% after reaching a record high of just over 147 in July. That`s quite a drop, for a 5 month period, isn`t it?What might the catalyst be for a turnaround? A...
Jim Rogers on Oil: It will Comeback
Saturday, October 10, 2009
Jim Rogers, the famous Indiana Jones investor said today that Oil Reserves are dropping 7% a year. These drop in reserves will cause serious supply problems in the near future. Jim Rogers concludes "Oil will make a big comeback".Today Oil Futures are down again in the pre-open session. We are in a true selling climax. Will this be a once in a liftime buying opportuni...
Inventories Released Tomorrow
Saturday, October 10, 2009
Inventories probably rose 900,000 barrels last week, according to the median of analyst responses in a Bloomberg News survey. The department is scheduled to release its next report at 10:35 a.m. tomorrow in Washington.Word on the Trading Desks ``The drop in consumer spending is not just being felt in the U.S., it's being felt everywhere. And that's a big part of why crude oil is trading at $40.'' ``The problems that Toyota is having underlines...
Oil Falls Again: Are We Bottoming?
Saturday, October 10, 2009
Oil prices fell again today as investors continued last week's practice. Crude oil futures fell 2.45 to settle at $39.91 a barrel. Word on the Pits:"This is a market that still needs to see proof of demand," said Phil Flynn, senior market analyst with Alaron Trading in Chicago."Given crude oil's weakness since OPEC's announcement, it is safe to assume the market is a bit skeptical regarding the group's ability to comply," Schork wrote in...
Contango Scares USO and DBO Investors
Saturday, October 10, 2009
Contango is the deepening discount of near month oil futures contracts against later months. This little monster is scaring investors off simple passive funds such as USO, DBO and OIL that helped drive the big oil rally in the last 6 years.Passive index plays like USO and OIL found big profits during much of oil's rally to over 147 a barrel in July by selling front month futures contracts and buying cheaper ahead the curve contracts, something...
Oil is Cheap vs. Gold
Saturday, October 10, 2009

Nice article about Oil being cheap when compared to Gold. 20 year chart of gold to oil ratio:"The lower and upper horizontal bands in the chart above show an oz of gold has exchanged between 22 and 10 barrels of oil since 1989. The ratio dipped to as low as 7 and right now it trades at 20. One shouldn't buck against the trend and I expect the ratio to exceed...
Oil Crash Graph
Saturday, October 10, 2009

This is the most impressive downtrend I have ever seen. Oil is being decimated every week. Can Oil keep imploding? I doubt it. There will be a major upswing in the near term. Look for 50 dollar oil in a few weeks.I have seen some scary projections, some predicting a 10 dollar oil. That is a complete nonsense. They sound like those calls to 300 dollar oil in...
Is the Government Trading Oil?
Saturday, October 10, 2009
January contract keeps falling but the oil is up longer the curve. I read something really interesting today about the Government selling front month crude oil and buying down the curve for late 2009 delivery. Arguably the Government is trying to stimulate the economy trying to drive down oil prices. With the Quantitative Easing policies still fresh in my mind anything is possible these days. One of these days the Fed ranks first as the...
Oil Crashes
Saturday, October 10, 2009
Who could imagine just a few months ago that oil futures could trade at 36 dollars a barrel? Pretty amazing. In the financial markets the old and bold traders tell you all the time to expect the inexpectable. Planning for extreme scenarios is absolutely necessary for survival in the markets these days.We are witnessing an OIL CRASH.As Jim Rogers says "Buy Panic and Sell Hysteria". Its probably a good time to add a few barrels to your portfolio...
Futures show Contango
Saturday, October 10, 2009
A market condition called contango, in which oil futures contracts going forward are higher than ones for the immediate future, has traders scrambling for crude storage as they attempt to lock in future profits.Phil Flynn, vice president at Chicago-based trading firm Alaron, said the oil contango has created a frenzy for storage space.“You pay as much as $2 a barrel to store it but you can lock in the profit instantly today and make out...
Oil Falls Below 40
Saturday, October 10, 2009
Crude Oil Futures dipped below 40 dollars a barrel for the first time in more than four years. Today the API said supplies climbed for the 11th time in 12 weeks. OPEC Cut, But Oil Falls“They are facing the distinct possibility of oil falling to 30 dollars a barrel and even lower,” said Addison Armstrong, director of market research for Tradition Energy in Stamford, Connecticut.“The OPEC announcement looks big on first glance but really...
OPEC makes Bigger than Expected Cut
Saturday, October 10, 2009
OPEC agreed to cut oil output by 4.2 million barrels a day from September production levels, Secretary-General Abdalla El-Badri said. The Organization of Petroleum Exporting Countries will cut output from a daily level of 29.045 million barrels three months ago, indicating a new quota target of 24.845 barrels a day. The reduction will take place from the start of next year.Even with this bigger than expected cut, crude oil futures are trading...
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