Recently in energy Category

January crude oil futures on Thursday hit a fresh six-week low and traded below $86.00 a barrel. The market has taken a haircut to the tune of around $14.00 a barrel from the all-time high above $99.00 scored a couple weeks ago. Serious near-term technical damage has been inflicted to suggest that at least a near-term top is in place. See on the daily bar chart for January crude oil that uptrend lines have been penetrated on the downside. Also, see at the bottom of the chart that the Moving Average Convergence Divergence (MACD) indicator is in a bearish mode as both the thick blue MACD line and the thin red "trigger" line have been trending lower for the past month. Both lines are poised to move into bearish territory below the horizontal "zero" line.

As light sweet crude oil prices approach $100.00 per barrel, lunch table conversations could turn from housing related issues to the economics of consumer spending with $100 oil. With $100/barrel oil, will consumers finally hit their threshold for spending and begin to cut back on disposable income purchases in order to fit energy costs into the monthly budget? We won't know what oil price will spark that turning point, but we feel that it may have already started.

November crude oil prices recently hit a fresh contract high above $82.00 a barrel. Prices then backed off on some profit-taking pressure and challenged trendline support from an uptrend line drawn off the August low, but could not punch below it. Bulls are still in firm technical command of crude oil and the price uptrend remains very strong.

Energy Complex (NYMEX)

Crude Oil:
Crude oil did push back above 75 as we mentioned it would in the last issue. The daily chart could be forming a double top if resistance above 78 holds. Frankly we do not see that resistance holding in the near term. We see this market moving to test the highs and even breaking out through them. OPEC will try and slow the pace of the rally but frankly they have less control over the price of oil than most people think. At this point it is not a question of if we will hit $80.00 a barrel but rather when.

Crude oil futures prices on the New York Mercantile Exchange Tuesday pushed above major psychological resistance at $75.00 a barrel. "It's 80 before 60" is the mantra heard on the trading floor, referring to the notion that crude oil futures prices will touch $80.00 a barrel before they back off to the $60.00-a-barrel level. The closely followed oil tycoon T. Boone Pickens last Friday said in a television interview that "I think you are going to see $80 before I'm 80." The 79-year-old Pickens said he turns 80 sometime next year. He has been right in his prognostications more often than not. "You cannot be short oil right now," he said.

There is a preconceived notion by the general public that when the market is making new highs, everyone is happy and when the market is headed lower, everyone is crying. Although this is an epic generalization, it describes what I have noticed as the general public’s perception. Some of my friends who are not in the financial industry, but know that I am, ask me “Did you see the Dow was up 150 points, I bet you are happy”. Well, no and yes. My personal stock/mutual fund portfolio might have done well that day, but that does not mean I am happy with the gains. I also have to consider our fund which takes a market-neutral approach. Instead, I look at it a different way (but in the long run, it is all about gains and losses).

August NYMEX crude oil futures had been knocking on the door of strong technical resistance at $70.00 a barrel recently, and on Thursday opened the door and walked right through it. Now, the next major upside price objective for the bulls is to challenge major psychological resistance at $75.00 a barrel. The crude oil futures market is fully bullish as an uptrend line is in place on the weekly crude chart, drawn from the January low of $49.90 a barrel, basis nearby NYMEX futures.

The Big Bear is roaring in the first decade of the 21st century. Sixteen years after the collapse of the Soviet Union, Russia is once again making a play for Great Power status. In addition to its massive stockpile of nuclear arms, the country has resources that may give it even more leverage in the post-Cold War world -- one of the world's biggest reserves of oil and its biggest reserve of natural gas, as well as abundant supplies of aluminum, titanium and timber.