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Natural Gas Surges Past Key Levels, Eyeing Higher Targets
By: Bruce Powers | November 20, 2024

• Natural gas confirmed a decisive breakout above 3.02 and 3.16, indicating strong bullish momentum with next resistance levels at 3.35–3.45.

Natural gas triggered an upside breakout on Wednesday as it surged above the 3.02 swing high from early-October. At the time of this writing, the high of the day was 3.23, and it continues to trade strong, near the highs of the day. The low of the day was 2.94. A strong close would put it in a solid position for a continuation higher.

Nonetheless, the breakout was decisive, partly due to the sustained buying seen reflected in the day’s long range green candle and likely strong close. But there was also a second breakout above the June swing high of 3.16 that confirmed strength. A daily close above that level today will further indicate improving demand. In addition, a daily close above 3.16 will be the highest daily closing price in 54 weeks.



Strong Breakout of Symmetrical Triangle

Today’s strong rally triggered a breakout of a large symmetrical triangle pattern, and it will be confirmed on a daily close above 3.02. Also, the continuation of two rising ABCD patterns, one light blue and the other in purple, occurred on the advance above 3.02. And there was a third ABCD pattern (orange) that triggered a continuation of the pattern on the move above 3.16. The three patterns are a good example of the fractal nature of price patterns.

First Target (minor) Hit

A first target at 3.22 was reached today and tested as resistance. So far, there is enough resistance to stop the advance, if natural gas ends today with that high price. That price target is the initial projection from the near-term light blue rising ABCD pattern. Since it is the smallest structure of the three ABCD patterns, it had the greatest chance of being reached.

Since the triangle pattern is a long-term pattern that has been forming for some months, the bullish reaction from the breakout may overrule potential resistance at the first target for the smaller pattern. Bullish momentum seen today could continue to the next higher potential resistance from around 3.35 to 3.45. That price zone is found at the confluence of four projected price levels.

Monthly Breakout Confirms Strength

The 3.02 swing high was also the monthly high from October. Therefore, a monthly trend continuation signal occurred today. The dominant trend is seen in the monthly pattern as it can influence price patterns in the shorter time frames.

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Bull Headline. The Energy Report
By: Phil Flynn | November 20, 2024

Oil prices were showing signs of an oil bottom but were temporarily thwarted on a bull headline. Ok, maybe not a bull headline but one that caused oil prices to make a sharp drop of over a dollar a barrel in a matter of seconds. The headline that caused the algo computers to go all red was, “Iran agrees to stop producing near bomb-grade uranium to allow experienced inspectors to verify – IAEA”. Of course, you can’t judge a book by its cover nor can you trust the headline.

The oil market came back when those who read the Wall Street Journal’s (WSJ) version of the whole story came away with a much different impression than the headline had the market believe. In fact, if the wire services led with the WSJ “Iran Sharply Expands Stockpile of Nuclear Fuel Ahead of Trump’s Return” you may have got a dollar breakup rally. So, it is a little curious as to who releases these headlines and so often at critical oil resistance points. And it’s amazing how quickly the computers can move the market milliseconds after the headline is released.

The impression that Iran is seeking a declaration may not be the case. The WSJ wrote that Iran’s decision to expand its stockpile of nuclear fuel and its failure to fully cooperate with the International Atomic Energy Agency, the IAEA, which monitors Tehran’s work, is set to trigger fresh diplomatic pressure from Europe. “Concerns are growing in Western capitals that Iran could decide to develop a nuclear weapon, after comments by senior Iranian officials that Tehran has mastered most of the techniques for doing so. Israel’s hollowing-out of Hezbollah, Iran’s most powerful proxy in the Middle East, has also prompted a public debate in Iran about whether the country’s best form of deterrence lies in having an atomic bomb. Iran has always claimed that its nuclear work is solely for peaceful civilian purposes.

As far as peace, Bloomberg is reporting that, ‘Vladimir Putin rules out major territorial concessions in any talks with US President-elect Donald Trump on a cease-fire in Ukraine, but the Kremlin could agree to freeze conflict along front lines. Reuters reports, citing five unidentified, current and former Russian officials. There may be room for negotiation over carve-up of four regions of Donetsk, Luhansk, Zaporizhzhia and Kherson, Reuters reports, citing three of the people. Yet it’s clear that headline or no headline the market has a bit of resistance to break back above $70. Yet the charts show strong bottom signals and a break above $70.00 may be the catalyst for starting a longer-term trend.

The American Petroleum Institute (AP)I signaled that gasoline demand is improving as supplies fall yet again to multi-year lows. The January gasoline crack spread hit the highest level of the year as API reported that gasoline supply fell by about 2.48M barrels, while distillate inventories including the soon to be used heating oil, fell by 688,000 barrels. The fact that product inventories fell further below average for this time of year overshadowed that U.S. crude inventories rose by about 4.75M barrels.

The bears are still focused on Chinese demand. It seems to me that China’s demand for oil is being fed internally as they draw down inventories. It also seems to me that the bearish argument that electric cars are cutting into China’s demand for oil but what’s interesting is that China electricity demand is going through the roof and they have to use more coal to power their electric grid.

John Kemp Energy reported that CHINA’s thermal electricity generation (nearly all from coal) increased to a seasonal record 477 billion kilowatt-hours (kWh) in October up from 465 billion kWh in the same month in 2023 and 445 billion kWh in 2022. Wind and solar generators produced record amounts of power, but hydro output slipped, and increased thermal generation was needed to satisfy the continued growth in load. So, it’s dubious to assume that there is gaining much of a positive impact on the environment.

With President Trump in office, there’s hope not only for US energy producers but also for Canada has seen some of the prices of their oil and gas fall to historically low levels partly because of the inability to transport it effectively with President Trump back in office. Alberta might make natural gas great again.

The EIA reported Northwest U.S. and western Canadian natural gas prices traded at historic lows in 2024. Monthly average natural gas spot prices at northwestern U.S. and western Canada border pricing hubs reached historic lows in 2024 through October, according to data from Natural Gas Intelligence. Robust natural gas production in western Canada, where output has generally increased over the last two years, and high natural gas inventories in the region contributed to the low prices.

Winter storms are back giving natural gas a pop over $3.00 in the Henry Hub. Producers are hoping for an old-fashioned Christmas and a very cold one. EBW warns that, “Bullish momentum may be running out of steam, however. Key resistance at $3.07 may represent a crucial inflection point. If building cold can lift prices higher, sizable speculator short covering could amplify any rally. More likely, however, is that current conditions—showing both forecast cold in the 11-15 day window yet production still held down by spot gas prices near $2.00—may foreshadow losses if either projected cold fades or supply surges.

Longer term, the fundamental outlook is dominated by storage nearly 400 Bcf above average across North America and production poised to push higher. Absent colder winter weather, renewed selling pressure appears favored.

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EIA: U.S. Crude Stocks Rise as Imports Surge, Refinery Activity Slows
By: James Hyerczyk | November 20, 2024

Key Points:

• U.S. crude oil inventories rose by 0.5M barrels, contrary to expectations of a drawdown, keeping stocks 4% below the five-year average.
• Gasoline inventories increased by 2.1M barrels, yet remain 4% below the five-year average, hinting at seasonal supply concerns.
• Refinery inputs fell 281K bpd, with refineries operating at 90.2% capacity. Gasoline and distillate production also declined.
• Crude imports surged to 7.7M bpd, up 1.2M bpd from last week, marking a four-week average 2.7% higher than last year.
• Weak distillate demand, down 6.4% year-over-year, signals ongoing challenges for middle distillate markets despite steady production.

U.S. Crude Oil Inventories Edge Higher Despite Refinery Slowdown
U.S. crude oil inventories rose modestly in the week ending November 15, 2024, as refinery activity slowed and imports climbed. According to the latest data, commercial crude oil inventories increased by 0.5 million barrels to 430.3 million barrels, maintaining a level 4% below the five-year average. This came despite pre-report expectations of a 100,000-barrel decline, underscoring mixed signals for crude oil prices.

Refinery Utilization Falls as Crude Inputs Decline

Crude oil refinery inputs averaged 16.2 million barrels per day (bpd), a decrease of 281,000 bpd from the previous week. Refineries operated at 90.2% of their capacity, reflecting a slowdown in processing activity. Gasoline production dropped to 9.3 million bpd, while distillate fuel production fell to 4.8 million bpd, marking declines in key petroleum product outputs.

Crude Oil Imports Surge While Product Imports Remain Mixed

Crude oil imports surged by 1.2 million bpd to 7.7 million bpd, significantly above the four-week average of 6.6 million bpd. This represents a 2.7% increase compared to the same four-week period last year. In contrast, motor gasoline imports remained relatively low at 374,000 bpd, while distillate fuel imports averaged 123,000 bpd.

Product Inventories Show Mixed Trends

Total motor gasoline inventories rose by 2.1 million barrels but remained 4% below the five-year average. Both finished gasoline and blending components saw gains, suggesting a rebound in gasoline supply. Distillate fuel inventories edged down by 0.1 million barrels and also stood 4% below the five-year average. Meanwhile, propane/propylene inventories dropped by 0.7 million barrels but stayed 10% above their five-year average, signaling robust supply in this category.

Demand Trends Provide Limited Support

Total products supplied averaged 20.7 million bpd over the past four weeks, a modest 1.2% increase year-over-year. Motor gasoline demand rose slightly, averaging 8.9 million bpd, up 0.5% from the same period last year. However, distillate fuel demand contracted sharply, falling 6.4% year-over-year, while jet fuel demand dipped 1.3%, indicating softer conditions in middle distillate markets.

Market Forecast: Bearish Outlook for Crude Prices

The combination of rising crude imports, higher inventories, and softer demand for distillates and jet fuel suggests limited upside for crude oil prices in the near term. While refiners may increase runs in the coming weeks, the current supply-demand balance points to a bearish outlook for crude oil, particularly if demand fails to rebound significantly in key product categories.

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Natural Gas Eyes Sustained Breakout as Bullish Momentum Builds
By: Bruce Powers | November 19, 2024

• Natural gas rallied above 3.02 but faces resistance at 3.06. A confirmed breakout could target 3.16, 3.22, and higher resistance levels within a bullish trend.

Natural gas attempted a bullish breakout on Tuesday as it rallied above the prior swing high of 3.02. Resistance was seen shortly thereafter at a high of 3.06. To confirm the breakout a daily close above 3.02 is needed and it is not clear yet whether that will happen.

Nonetheless, it looks like natural gas will close strong relative to the bigger picture. It looks to be on track to end the day at its highest daily closing price since June 12, which ended at 3.03. And there was only one day that ended higher going back to January 12. Each of those two days is at or near a prior peak that makes up a series of lower swing highs.



Will Breakout Confirm?

The advance today triggered a breakout of the closest prior swing high in the series of lower swing lows at 3.02. Once there is a daily close above 3.02, assuming further bullish moves, an upside breakout of a large symmetrical triangle pattern will have confirmed the breakout. In addition, today’s rally triggered a likely continuation of the bull trend that started from the August swing low, as there is now a higher swing high. A daily close above the 3.02 high also will confirm the continuation of that trend. A confirmed breakout indicates that there is a greater chance for a continuation of the move.

Upside Looks Towards 3.35

Once the price structure of the triangle is busted with a higher swing high, previous higher swing highs become a target. And a confirmed breakout above either will provide another sign of strength. The first is 3.16 from the peak in June. Given the potential improvement in momentum once a breakout is confirmed that price target may easily be surpassed leading to 3.22.

However, that is a short-term target as it is derived from the most recent rising ABCD pattern (light blue) that shows price symmetry between the two swings at that target. Further up is a price zone of potential resistance from 3.35 to 3.45. An ascending ABCD pattern (purple) reaches its target at 3.35. At 3.39 there is a match with resistance seen at the January peak, while there is an extended ABCD target at 3.42. The range ends with the target from a large rising ABCD pattern at 3.45.

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Crude Oil Tests Resistance at 20-Day MA Amid Choppy Trends
By: Bruce Powers | November 19, 2024

• Crude oil's recent rally faces resistance at $70.14, with choppy trading expected unless a breakout above $73.27 or breakdown below $66.86 occurs.

Crude oil bounced to a six-day high of 70.06 on Tuesday before encountering resistance. That high essentially successfully tested resistance around the 20-Day MA, now at 70.14. However, once the high was hit sellers took back control leading to a pullback. At the time of this writing, crude is trading below the mid-point of the day’s trading range, further reflecting that sellers remain in charge. The low for the day so far is 68.79.



Resistance for the Day at 20-Day MA

Since crude seemed to have recognized the 20-Day MA, even though it is contained within a rectangle consolidation formation, today’s high along with the 20-Day line marks near-term resistance. A bullish breakout above the 20-Day line will indicate short-term strength, but within a dominant consolidation pattern.

This means that until crude moves out of the pattern and stays out of it, trading will likely remain choppy with low conviction moves. An advance above the 20-Day line has crude heading towards the top of the pattern at 73.27. Also, there may be some reaction on the approach around the 50-Day MA at 71.19.

Decline Possible Below 67.05

A bearish breakdown from the rectangle triggered on Monday as crude fell below the prior low of the range at 67.05. But following a drop 66.86, buyers stepped in and took back control, which led to today’s high. Monday was a reversal day where the day began with sellers in charge as crude fell to a 47-day low, and it ended with buyers back in charge, reaching a five-day high and ending at a six-day closing high. If crude oil can continue to strengthen above the 20-Day line, the internal downtrend may also provide an indication of strength or weakness.

Bull Breakout Above 73.27

If crude can breakout above 73.27 and continue to strengthen it likely heads towards the 61.8% Fibonacci retracement at 74.60, along with potential resistance from a trendline that marks the bottom boundary of a large symmetrical triangle pattern. Subsequently, the 78.6% retracement at 76.57 along with the 200-Day MA at 77.38, becomes the next higher targets.

Downside Trigger Points to 65.65

Alternatively, a sustained decline below this week’s low of 66.86 has crude first testing support around the swing low of 65.65 from early-September. That low was the lowest traded price for crude oil since May 2023. If it fails to hold as support crude next targets the 63.68 to 63.30 potential support zone, which happens to be around the long-term downtrend line.

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Supersonic Risk. The Energy Report
By: Phil Flynn | November 19, 2024

Global energy markets are rocking as the market reacts to supersonic risks. Reports overnight that Ukraine made their first MGM-140 Army Tactical Missile System (ATACMS) inside of Russia is raising concerns about how Russia will respond to this latest US approved escalation.

Bloomberg reported that Russia’s Defense Ministry said debris caused a fire in a military installation in the Bryansk region, which is on the border with Ukraine. Yet no casualties were reported. Russia said that five of the missiles were shot down and one was damaged, according to Interfax.

This attack came as Russian President Vladimir Putin says that this escalation has lowered the threshold for a nuclear strike in response to a broader range of conventional attacks. Bloomberg reported that European natural gas rose for a fourth consecutive day as traders monitor developments in Russia’s war on Ukraine after Kyiv carried out its first long-range missile strike. Benchmark futures gained as much as 1.1% after fluctuating earlier in the morning and are near their highest levels in a year.

Oil looks like the technicals are turning bullish. Yesterday’s dip and flip suggests selling exhaustion and perhaps a renewed focus on supply that continues to be below normal. One of the consistent bearish arguments has been weak demand in China. Yet today OIL Price reports that, “China’s crude oil surplus shrank from 930,000 barrels daily In September to 500,000 bpd in October, Reuters’ Clyde Russell reported today, based on data calculations. He did say that, “however, the significant decline was nothing to write home about, as crude oil imports and refinery run rates during last month also fell.

In October China imported a total of 10.53 million barrels per day of crude oil, per data from the General Administration of Customs cited by Reuters earlier this month. That’s 9% lower compared to October 2023 and 2% below the import level of 11.07 million bpd in September 2024.

One of the most interesting dynamics for the energy complex might come down to weather. Over the last few years warmer than normal winters has allowed the market to get by despite inventories of winter fuels that in many cases like natural gas in Europe and global diesel supply, were below normal. Can we get away with that again? Mother nature has bailed out the market against tight gas and diesel supply by providing us with warm winters, but we are seeing some signs of winter by Fox Weather.

Fox Weather is reporting that, “a pair of powerful winter storms packing snow, heavy rain and strong winds is expected to lead to treacherous travel conditions this week. This comes as millions of people across the U.S. prepare to hit the road and pack airports ahead of Thanksgiving. The first storm system is already underway across the central U.S., where it unleashed rounds of severe weather on Monday. Severe thunderstorms packed damaging wind gusts that blew over tractor-trailers, dropped large hail, and even produced tornadoes that impacted the region at the start of the workweek. The storm system is now continuing on its journey to the north, where the FOX Forecast Center says it will begin to pull in frigid arctic air from Canada, resulting in widespread snow across portions of the Dakotas and into the Upper Midwest. It’s time for you to download the Fox Weather ap.

John Kemp Energy pointed out that, “Europe’s gas storage has depleted unusually fast since the end of October as cold temperatures and the lack of sunshine and wind have driven a big increase in heating demand and gas-fired generation. EU gas storage has depleted by more than 4 percentage points, the fastest for the year since 2016. Storage sites are still 91% full but that is well below the 99% rate this time in 2023 and 95% in 2022. The region is only 15% of the way through the typical heating season. Gas futures prices have risen to the highest for a year to attract more LNG cargoes, minimize gas generation, and conserve stocks as much as possible.

The outlook for colder weather should support the entire complex. I also believe that when it comes to geopolitical risk factors, they’re definitely on the rise. The inventories this week should show another drawdown in both crude oil and distillates. We’re starting to see some support and the crack spreads with an incredible pop up on the diesel crack yesterday, could signal that the market is starting to get a little bit concerned about diesel supplies well below the 10 year average going into winter.

The technical bottom yesterday in crude oil could signal that the hedge fund selling could be coming towards an end. We will get the American Petroleum Institute report today and that should give us a little bit of an idea of where we’re going to be for the Energy Information Administration supply report.

Natural gas is getting a pop from the weather and it’s going to be interesting to see if it continues to lean towards winter like weather.

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Natural Gas Poised for Bullish Breakout Amid Near-Term Momentum
By: Bruce Powers | November 18, 2024

• Testing key resistance, natural gas eyes a bullish breakout; sustained rally above 3.02 may lead to upside targets amid move out of symmetrical triangle pattern.

Natural gas continued to strengthen on Monday as it rose above Friday’s high to test resistance around Thursday’s high. Support seen at the low of the day 2.83, which was around Friday’s high at 2.84. This reflects near-term strength as demand was strong enough to keep the price of natural gas from falling into Friday’s price range.

The high of the day at the time of this writing was 2.98, which is slightly above the top boundary line of a symmetrical triangle pattern. Trading continues near the top third of the day’s trading range and if natural gas can end the day above the opening price at 2.98, it may complete a bullish hammer candlestick pattern. Nonetheless, a decisive upside breakout will be needed to signal a continuation higher.



Rally Above 3.02 Triggers Breakout

A decisive rally above the recent swing high of 3.02, which is also the high for the current advance, will trigger a continuation of the rising trend that began from the August swing low. In addition, a bull breakout of a symmetrical triangle consolidation pattern will be indicated. Subsequently, a daily close above 3.02 will confirm strength indicated by the breakout. The next target would then be the June swing high of 3.16. A sustained rally above that price level will further confirm strength following the breakout. Subsequently, upside targets derived from prior swing highs, will then be at 3.39, from the January swing high, and then the 2023 peak at 3.64.

Watch the Behavior of Price

It remains to be seen whether a bull breakout is recognized by the market. Some considerations are whether upside momentum noticeably improves following the breakout, how clear and decisive is the advance, and was the close strong or weak on the breakout day? In addition to the targets from price structure noted above, there are three measured moves marked on the chart as ABCD patterns. They identify potential targets starting at 3.22 (green). If that price level is exceeded, then a large pattern in purple shows completion at 3.35. Further up from there is another target at 3.45 (orange).

Key Support Remains 20-Day MA

Despite the possibility of an eventual upside breakout, until it happens, downside risk remains. Potential support is around the 20-Day MA, currently at 2.70. If the 20-Day line retains support during weakness, the possibility of an eventual upside breakout remains. However, a drop below last week’s low of 2.69 diminishes the near-term potential of an upside breakout and improves the chance for a deeper pullback.

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Raising World War Risk. The Energy Report
By: Phil Flynn | November 18, 2024

President Biden seems to want to leave an even bigger mess in Ukraine. He gave the approval to allow Ukraine to use e U.S.-supplied missiles to strike inside Russia, which revered earlier limitations on the use of those missiles by Ukraine. Oil that was under pressure after Fed Chair Jerome Powell suggested that he is in no hurry to raise interest rates. Chinese demand concerns continue to overshadow global tight supply and optimistic predictions for the upcoming Thanksgiving travel expectations.
Radio Free Europe reported that The Kremlin has accused U.S. President Joe Biden of adding fuel to the fire and seeking to escalate the conflict in Ukraine by lifting restrictions on long-range weapons. Kremlin spokesman Dmitry Peskov’s comments on November 18 come after reports that Biden has granted Ukraine permission to use U.S. weapons to strike deeper into Russia.
Peskov said “It’s obvious that the outgoing administration in Washington intends to take steps in order to continue fueling the fire and provoking further escalation of tensions.”
One report said that Vladimir Putin Says Russia is now ‘At War’ With NATO After Biden confirmed that long range missile restrictions have been lifted. He also is going to hold the US responsible.
Oil traders are taking this seriously and watching developments.
According to AAA gasoline prices on the national average are right around $3.70 a gallon the hopes that gasoline will get below $3 a gallon on a national average or looking a little bit less likely as gasoline inventories plummet and demand is expected to break records for the upcoming Thanksgiving Day holiday.
Last Week the EIA reported that US gasoline inventories were at their lowest in two years. The Energy Information Administration (EIA) reported that gasoline stocks fell to 206.9 million barrels, which was a 4.4-million-barrel decrease from the previous week. This was lower than the 600,000-barrel increase that analysts had expected.
Now AAA has come up with their latest prediction of how many folks will go over the river and through the woods to see Grandma by plane trade and automobile AAA that a record 80 million hit the roads, catch flights and board cruises and that is 1.7 million more people that will travel this year from Tuesday, Nov. 26 to Monday, Dec. 2, compared to last year.

The weekly chart on oil seems to be trying to bottom that we continue to face headwinds with uncertainty surrounding the stock market war risk continues to rise in the market seems to put that on the back burner but inventories should be tight once again as we expect to see crude oil inventories fall this week by 3,000,000 barrels we expect the products like gasoline to fall by 2,000,000 barrels and the distillate inventories to fall by 3,000,000 barrels refinery runs will be up 0.5.
Natural gas has given him a little bit of a bounce but seems to be stuck in a tight trading range John Kemp from Kemp energy said that European gas futures price for deliveries at the heart of winter 2024/25 have climbed to the highest level for almost a year as the heating season has got off to a relatively cold start across much of Northwest Europe.
Futures prices for deliveries in January 2025 have averaged almost €43 per megawatt-hour so far in November 2024 up from a recent low of €32 in February 2024 and the highest since €51 in November 2023. Frankfurt has experienced 286 heating degree days so far this heating season compared with just 207 at the same point in 2023 and 246 in 2022

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WTI Crude Oil CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | November 16, 2024

• Following futures positions of non-commercials are as of November 12, 2024.

WTI crude oil: Currently net long 179.3k, down 15k.



West Texas Intermediate crude is teetering on support. The past couple of months, it has found buyers at $66-$67. On September 10, it fell as low as $65.27. Since September last year when the crude ticked $95.03 before heading lower, it has made lower highs, with the most recent being $78.46 on October 10.

This week, WTI gave back 4.9 percent to $66.92/barrel. Support at $66-$67 makes up the lower horizontal trendline of a descending triangle, hence crucial. It is a must-save for oil bulls. Should bids show up in the sessions ahead, what then happens at $71-$72 is even more important. For months, WTI played ping pong between $71-$72 and $81-$82. The support was lost early September. Since then, for the most part, the support-turned-resistance has held.

In the meantime, after remaining unchanged for four consecutive weeks at 13.5 million barrels per day – a record – US crude production in the week to November 8 dropped 100,000 b/d to 13.4 mb/d. Crude imports increased 269,000 b/d to 6.5 mb/d. As did crude inventory, which grew 2.1 million barrels to 429.7 million barrels. Stocks of gasoline and distillates, however, fell – respectively down 4.4 million barrels and 1.4 million barrels to 206.9 million barrels and 114.4 million barrels. Refinery utilization rose nine-tenths of a percentage point to 91.4 percent.

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Commodities Daily Market Movers (% Price Change)
By: Marty Armstrong | November 16, 2024

• Top Movers

London Aluminum Spot 5.5 %
NY Aluminium Futures 4.91 %
Zinc (99.995%) Spot 3.55 %
Canola Futures 3.04 %
NSW Baseload Electricity Continuous 2.76 %

• Bottom Movers

NY Crude Oil Futures 2.45 %
Cotton #2 (NYCE) Futures 2.34 %
London IPE Brent Crude Futures 2.09 %
London IPE Brent Crude Futures 2.09 %
NY Crude Oil Cash 2.08 %

*Close from the last completed Daily

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NY Crude Oil Futures (CL) »» Weekly Summary Analysis
By: Marty Armstrong | November 16, 2024

The NY Crude Oil Futures closing today at 6702 is immediately trading down about 6.46% for the year from last year's settlement of 7165. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. As of now, this market has been rising for this month going into November reflecting that this has been only still, a bullish reactionary trend.

Up to now, we still have only a 1 month reaction rally from the low established during September. We must exceed the 3 month mark in order to imply that a trend is developing.

ECONOMIC CONFIDENCE MODEL CORRELATION

Here in NY Crude Oil Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2009 and 2001 and 1998 and 1994. The Last turning point on the ECM cycle high to line up with this market was 2022 and 2018 and 2011 and 2000.

MARKET OVERVIEW
NEAR-TERM OUTLOOK

The historical broader tone of the NY Crude Oil Futures has been a bearish consolidation following the high established back in 2008. Since then, this market has created 2 reaction highs which have been unable to break this overall protracted bearish consolidating trend. Still, the major low was made in 2023 and the market has bounced back for the last year. The last Yearly Reversal to be elected was a Bullish at the close of 2023.

This market remains in a positive position on the weekly to yearly levels of our indicating models. Nevertheless, it closed last year on the weak side down from 2022. Pay attention to the Monthly level for any serious change in long-term trend ahead.

The perspective using the indicating ranges on the Daily level in the NY Crude Oil Futures, this market remains in a bearish position at this time with the overhead resistance beginning at 6728.

On the weekly level, the last important high was established the week of October 7th at 7846, which was up 4 weeks from the low made back during the week of September 9th. Afterwards, the market bounced for 8 weeks reaching a high during the week of November 4th at 7288. Since that high, we have been generally trading down for the past week, which has been a significant move of 8.315% in a reactionary type decline. Nonetheless, the market still has not penetrated that previous low of 6527 as it has fallen back reaching only 6682 which still remains 2.374% above the former low.

When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 7288 made 1 week ago. Still, this market is within our trading envelope which spans between 6432 and 7740.

Looking at this from a broader perspective, this last rally into the week of November 4th reaching 7288 failed to exceed the previous high of 7846 made back during the week of October 7th. That rally amounted to only four weeks. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action as well as trend.

INTERMEDIATE-TERM OUTLOOK

YEARLY MOMENTUM MODEL INDICATOR

Our Momentum Models are declining at this time with the previous high made 2021 while the last low formed on 2023. However, this market has declined in price with the last cyclical low formed on 2023 warning that this market remains weak at this time on a correlation perspective declining in both price and Momentum.

Looking at the longer-term monthly level, we did see a correction from the key high of April for five months. Since that low, however, we have consolidated for 1 month. Meanwhile, the past month has witnessed a rally of 6.11% percent. A month-end closing below 6633 will warn that the market is losing its upward momentum and should retest support below. It will take generally a monthly closing above 7846 to maintain a near-term upward rally.

Some caution is necessary since the last high 8767 was important given we did obtain two sell signals from that event established during April. That high was still lower than the previous high established at 9503 back during September 2023. Nevertheless, at this time, the market is still weak.

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Natural Gas Rebounds with Potential Breakout Above Key Levels
By: Bruce Powers | November 15, 2024

• After retesting 20-Day MA support, natural gas is poised for a potential breakout, with swing targets including 3.16, 3.22, and 3.35–3.45.

Natural gas dipped to a five-day low of 2.69 on Friday before encountering increased demand that led to an intraday bullish reversal. The subsequent rally reclaimed yesterday’s low of 2.83 and natural gas is on track to likely close in a bullish position, near the highs of the day. If Friday’s session closes in the top third of the day’s trading range, a one-day bullish hammer candlestick pattern will have formed.

Today’s low also plays a part in the potential for a bullish reversal on a move above today’s high. A successful test of support near the rising 20-Day MA (purple) earlier today and the subsequent bullish reaction, also point to improving demand. At the time of this writing the high for the day was 2.83.



Successful Test of 20-Day MA is Bullish

Today’s price action shows a successful retest of support around the 20-Day MA, which followed the first successful test on November 4. It potentially clears the way for a possible new breakout attempt about the 3.02 high (B). The last attempt failed attempt occurred on Wednesday. It remains to be seen whether that high retains resistance or whether a sustainable bullish breakout triggers. A daily close above 3.02 would confirm a breakout and put natural gas in a position to test higher potential targets.

Near-term Symmetry Points to 3.22

The first target would be the swing high from August at 3.16. But that level should be easily surpassed given the potential for a strong market response. There are two patterns that would be triggered. A sustained rally above 3.02 would trigger a breakout of a large symmetrical triangle pattern, as well as a continuation of the rising trend that began from the August swing low.

If the 3.16 high can be exceeded, the completion of a small rising ABCD pattern (purple) point to 3.22. But that is a relatively easy target to hit and possibly surpass. A more significant target range looks to be from 3.35 to 3.45, which is where there is a confluence of targets from Fibonacci projections and price structure.

Watch Behavior Following a Breakout

Regardless of the potential for higher targets to be reached as indicated by the analysis, how the price of natural gas behaves following a breakout should provide clues as to the strength or weakness of demand. There is always the possibility of a failed breakout. In general, the breakout of a trendline may not be as reliable as a break above a horizontal price level. This is why a break above a prior swing high in natural gas, especially if it makes up part of the triangle structure can be an important confirmation of strength.

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Reducing Tension. The Energy Report
By: Phil Flynn | November 15, 2024

Oil prices are weaker this morning in part because the Fed Chairman said, “The economy is not sending any signals that we need to be in a hurry to lower rates.” But also, on the perception of a reduction of geopolitical risk regarding Iran. Not only is it Iran now signaling that they will not retaliate against Israel for its recent attack they are also suggesting that they want to reach out to the Trump administration for talks and oh, yes they won’t try to kill him.

The Wall Street Journal in an exclusive reported that, ‘Iran offered written assurances to the Biden Oil star administration last month that it wasn’t seeking to kill Donald Trump”. The Journal says that, “the Iranian message, delivered on Oct. 14 and not previously reported, came in response to a private written American warning sent to Tehran in September. U.S. officials said it reflected the administration’s public message that it considered the threats against Trump a top-tier national security issue and that any attempt on and that any attempt on his life would be treated as an act of war.” Oil and OPEC star Amena Bakr reported that, “It’s clear that there is a degree of appetite to defuse tension in the Middle East.

This week Elon Musk reportedly met with Iran’s UN ambassador to discuss how tension could be defused between Tehran and Washington.” In fact, the New York Times did report the meeting was a discussion of how to defuse tensions between Iran and the United States, according to two Iranian officials who spoke with the New York Times. One of the Iranian officials said that the Tesla executive requested the meeting and that the ambassador picked the site.

On top of that on going concerns about China demand and the comments by the Fed chairman put a damper on the market despite what was a very bullish weekly report. Gasoline inventories fell to a two-year low while demand surged. According to the EIA gasoline demand surged 9.383 million barrels a day from the week before, last week they showed that demand plummeted, the week before that they showed demand surged. Drivers make up your minds. The four-week moving average for total products demand was 20.8 million barrels a day, up by 1.8% from the same period last year. Gasoline demand averaged 9.1 million barrels a day, up by 0.6% from the same period last year. Distillate fuel products supplied averaged 3.9 million barrels a day over the past four weeks, down by 4.0% from the same period last year.

The natural gas rally was slapped back after a bearish Energy Information Administration weekly injection report. Working gas in storage was 3,974 Bcf as of Friday, November 8, 2024, according to EIA estimates. This represents a net increase of 42 Bcf from the previous week. Stocks were 158 Bcf higher than last year at this time and 228 Bcf above the five-year average of 3,746 Bcf. At 3,974 Bcf, total working gas is above the five-year historical range.

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Natural Gas Bearish Reversal May Test Key Support
By: Bruce Powers | November 14, 2024

• Failure to break recent highs has led natural gas lower, with support at the 20-Day and 50-Day MAs crucial for avoiding deeper declines.

Natural gas was unable to break above the recent high of 3.02 on Thursday and instead turned down and triggered a bearish reversal on a drop to a four-day low. At the time of this writing, natural gas had hit a low of 2.76 and it continues to trade near the lows of the day. It is on track to close weak, in the lower quarter of the day’s trading range.



Strong Bearish Momentum

Given the strong bearish momentum seen in today’s wide range red candle, it looks like natural gas may have a plan to test support again around the 20-Day MA, which is currently at 2.64. It is now lined up with a minor swing low, also at 2.64. Together, they indicate stronger potential support than if they were alone. A little lower is the 50-Day MA at 2.59, followed by a prior swing low at 2.51. Either price area may see signs of support.

Risk of Bearish Weekly Pattern

Nonetheless, since there is only one more trading day for the week, if downward pressure remains on Friday, there is a chance natural gas will complete the week with a bearish shooting star candlestick pattern. That would provide a potentially bearish weekly setup heading into next week. Once one side of a consolidation pattern is tested as either support or resistance, there is the potential to eventually test the other side of the pattern.

Natural gas found resistance this week around the top boundary line of a large symmetrical triangle pattern. A bullish breakout of the triangle would occur on a sustained rally above the prior sein high at 3.02. But since resistance was seen leading to today’s selloff, there is the potential to test support eventually near the bottom of the pattern. This doesn’t mean it will do so, but it does indicate selling pressure and that could provide a surprise to the downside.

Key Support Defined by 50-Day MA

Nevertheless, until there is a decisive decline below the 50-Day MA, the likelihood of finding support that leads to a bullish reversal at or above the 50-Day line is the dominant thesis. A drop sustained decline below the 50-Day line would possibly lead to a retest of support around the 200-Day MA, currently at 2.24.

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Glut Of Dreams. The Energy Report
By: Phil Flynn | November 14, 2024

President Trump’s desire to cut energy prices in half will be a lot easier if the International Energy Agency’s prediction of a coming oil glut is correct. (spoiler alert; it is probably not). In fact, the Internal Energy Agency (IEA) has a history of making bold predictions on supply and demand that rarely come true. Yet in all fairness, the fine line between a global oil market surplus or a global oil market supply deficit is thinner than it has been in the past because of record oil production of light oil in the US and rising production in other non-OPEC.

The IEA is predicting a coming oil glut. The OPEC Plus cartel is subdued because of weak demand from China regardless of what they decide to do regarding their production cuts. That prediction may be a little IEA shot at the OPEC -Plus cartel because they had to reduce their more optimistic demand forecasts four times in a row. Now the IEA may be suggesting that the old cartel is becoming irrelevant.

Of course, if the IEA wants to throw stones, they must remember that they live in a glass house. I am sure it is a very energy efficient glass house, but if you want to put their past predictions on supply and demand and compare it to OPEC, I think their solar powered glass house would be shattered.

The IEA says that even as global oil demand is at all-time highs they say demand remains ‘subdued’. The IEA predicts that, “World oil demand is forecast to expand by 920 kb/d this year and just shy of 1 mb/d in 2025, to 102.8 mb/d and 103.8 mb/d, respectively. The slowdown in growth from recent years reflects the end of the post-pandemic release of pent-up demand and below-par underlying global economic conditions, as well as clean energy technology deployment.

The IEA did acknowledge that global oil inventories plunged by 47.5 mb in September, to their lowest level since January, led by a sharp draw in OECD oil products and non-OECD crude oil stocks. OECD industry stocks fell by 36.4 mb to 2 799 mb, 95.3 mb below the five-year average. Provisional data suggest total global stocks decreased for a fifth consecutive month in October. They predict that global oil supply rose by 290 kb/d in October to 102.9 mb/d, as the return of Libyan barrels to the market more than offset lower Kazakh and Iranian supplies.

OPEC+ delayed the unwinding of extra voluntary production cuts to January, at the earliest. Non-OPEC+ producers will boost supply by roughly 1.5 mb/d in both 2024 and 2025. Yet betting on the IEA hope for an oil glut could be dangerous if China demand exceeds their expectations. With global oil inventories below average it won’t take much of an uptick in demand to send us higher. Winter, anyone?

Besides, the next OPEC-plus meeting is scheduled for the 1st of December. 2025 oil policy will be discussed, and they may want to send a message, not just to the oil market but the world’s biggest green energy agency, known as the IEA. This comes as both OPEC and Russia continue to stress the importance of their cooperation and their commitment, to the oil market.

Still oil prices are getting its Trump dump. The key thing we are seeing is a reduction of geopolitical risk premium as our advisories are wary of doing the same things they got away with the current administration.

Iran hates Donald Trump so much they tried to have him killed, but they sure do fear and respect him. Sources tell Sky News Arabia that Iran is standing down from retaliating against Israel after a warning message was conveyed via Iraq. Iran is now exploring negotiations with the Trump government.

Iran may start the negotiations like. Oh Donald! That assassination attempt was just a big misunderstanding. Please, oh please let us sell our oil. We promise to behave.

Below $3.00 gas as a national average might prove to be elusive, but we will be close but no cigar. While some parts of the country will be below $3.00 a gallon, the possibility of a squeeze up in California prices and other major markets may keep the national average from tipping below that point before Thanksgiving with the improvement and the crack spread and demand expectations on the rise it’s going to be tough but stay tuned.

We told natural gas traders they should download the Fox Weather app because once again weather developments gave natural gas a big pop to the upside. Fox Weather reports that Tropical Depression Nineteen to become Tropical Storm Sara, slam Central America with life-threatening impacts. The NHC said Tropical Depression Nineteen will continue to move to the west on Thursday, taking it across the western Caribbean Sea. After that, the system is expected to stall and meander near the coast of Honduras on Friday and through the weekend. The track of this storm looks like it’s very possible that it will move offshore. Natural gas production that has just recovered from the last hurricane.

The long-term outlook for natural gas is looking incredible as the war on fossil fuels will end under the Trump presidency. Even people that are very concerned about climate change found it ridiculous that the Biden administration tried to discourage the exports of liquefied natural gas and discourage production of the one fuel that could make significant reductions in global greenhouse gas emissions by replacing dirty or coal and oil.

Today the Energy Information Administration report for natural gas is at 9:30a central time. We are looking for an injection of 36 billion cubic feet. We also get the Energy Information Administration report at 10 central time.

The American Petroleum Institute reported Crude: -0.777M /Cushing: -1.859M /Gasoline: +0.312M /Distillates: +1. impact 136M.

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Crude Inventories Rise By 2.1 Million Barrels, Exceeding Analyst Estimates
By: Vladimir Zernov | November 14, 2024

Key Points:

• Strategic Petroleum Reserve increased from 387.2 million barrels to 387.8 million barrels.
• Domestic production declined from 13.5 million bpd to 13.4 million bpd.
• WTI oil made an attempt to settle above the $69.00 level after the release of the report.

On November 14, 2024, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories increased by 2.1 million barrels from the previous week, compared to analyst consensus of +1.85 million. At current levels, crude inventories are about 4% below the five-year average for this time of the year.

Total motor gasoline inventories declined by 4.4 million barrels, compared to analyst forecast of +1 million barrels. Distillate fuel inventories declined by 1.4 million barrels from the previous week.

Crude oil imports increased by 269,000 bpd, averaging 6.5 million bpd. Over the past four weeks, crude oil imports averaged 6.3 million bpd.

Strategic Petroleum Reserve increased from 387.2 million barrels to 387.8 million barrels as U.S. continued to buy oil for reserves.

Domestic oil production declined from 13.5 million bpd to 13.4 million bpd due to hurricane-related disruptions.

WTI oil made an attempt to settle above the $69.00 level as traders reacted to the EIA report. Falling gasoline inventories may provide additional support to oil markets in today’s trading session.

Brent oil tested the $73.00 level as traders focused on the EIA data. It should be noted that the decrease in U.S. domestic oil production is temporary, although it may serve as a positive catalyst for oil markets in the near term.

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Oil News: IEA Forecasts 2025 Supply Surplus, Bearish Outlook for Oil Prices
By: James Hyerczyk | November 14, 2024

Key Points:

• IEA forecasts global oil supply to exceed demand by over 1M bpd in 2025, pressuring crude prices into a potential surplus.
• IEA maintains moderate 2025 demand growth forecast at 990,000 bpd, down from 2M bpd in 2023, citing weaker economic conditions.
• Strong U.S. dollar raises oil costs for foreign buyers, adding bearish sentiment to crude’s already subdued demand outlook.
• EIA raises U.S. oil output forecast to 13.23M bpd, marking a new record and further challenging global crude market recovery.
• Slowing oil demand in China contributes only 140,000 bpd to growth in 2024, down sharply from 1.4M bpd in 2023.

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Natural Gas Tests Resistance Levels with Bullish Breakout Potential
By: Bruce Powers | November 13, 2024

• Natural gas shows bullish momentum as it breaks key levels, with eyes on further gains if it can advance above 3.02.

Following a dip earlier in Wednesday’s trading session natural gas subsequently rallied off support of 2.83, the low for the day. For the second day in a row, it broke out above the top trendline of a large symmetrical triangle pattern. A breakout was attempted yesterday with a new high of 3.01 but it was quickly met with resistance that led to a down day and a close below the trendline.

In other words, it closed weak and showed signs of a failed breakout. A second attempt today shows that buyers remain in control. At the time of this writing natural gas continues to trade near the highs of the day and above the trendline. A close today above the line will show strength. Moreover, a daily close above 3.00 will be the highest closing price since June 13.



Rally Above 3.02 Triggers Bull Breakout

Resistance was seen on Tuesday following the day’s high of 3.01. That was a failed attempt to break out above the most recent swing high of 3.02. A decisive rally above that high should provide a more reliable indicator for the triangle breakout. It will also signal a continuation of the rising trend that began from the August swing low as a higher swing high will be triggered.

The 3.02 high is also a monthly high for October. Therefore, a rise above it will also trigger a monthly upside breakout and result in a third month in a row of higher monthly highs and higher lows. Nonetheless, if natural gas can end the month above September’s closing price of 2.91 it will have reached its highest monthly closing price since October 2023.

Initial Upside Target at 3.22

Given the bullish recovery today following a pullback, it looks like natural gas may have completed a short correction and could attempt to advance above 3.02 shortly. If it can sustain a rally above that high, it next heads towards the 3.16 swing high from June. Then, a little higher, is an initial target from a small rising ABCD pattern (light blue) at 3.22. However, there is a confluence of price targets from 3.35 and 3.45, including the initial target from a rising ABCD pattern at 3.35 (purple) and a larger ABCD pattern marked in orange that targets 3.45.

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A Gift of God. The Energy Report
By: Phil Flynn | November 13, 2024

The UN yearly money grab or ‘climate summit’ known as COP 29, is taking place in Baku, Azerbaijan, a place climate genius Greta Thunberg calls “beyond absurd”. Almost as absurd is world leaders taking Greta Thunberg seriously. The reason the location of Baku, Azerbaijan is so absurd to Ms.Thunberg is because Baku, Azerbaijan is a city that is built by the production of fossil fuels and gave prosperity education and health to the people of that place.
In fact the people of Azerbaijan have a different take. The leaders have a different take on the origins of the city. Azerbaijan’s president Ilham Aliyev opened the conference by reminding global elites that, “oil and gas “are a gift of God.’ A gift that powers their economy and life and is an important driving force that lifts millions of people out of poverty around the globe.
What is also absurd is that the track record of all the billions of dollars collected by the UN COP meetings have failed to come up with concrete solutions to have a plan to reduce carbon emissions without causing a sharp rise in global poverty and hunger. Who can forget our outgoing Treasury Secretary Janet Yellen when she tried to win favor by the UN COP folks by trying to shame investors into not investing in fossil fuels. A stunning lack of understanding about the real world needs of energy and its impact on the cost of global food costs and inflation.
In fact, the Biden Administration was more than happy to get the money shake down from the UN and gave billions of dollars to redistribute to the county of the UN’s choice. In 2022 that included the doubling the U.S. pledge to the Adaptation Fund to $100 million and announcing over $150 million in new support to accelerate the President’s Emergency Plan for Adaptation and Resilience (PREPARE) efforts across Africa. These build on the over $20 million that Biden has announced this year to accelerate PREPARE’s work in Small Island Developing States. Yet what we see is the waste. Just because you give more power and money to the UN to distribute, it does not mean it will save the planet or actually improve to lives of people on the earth.
For the oil trade, predictions of peak oil production and demand keep getting kicked back in the world of reality. Oil prices are still trying to balance a very tight physical market today with more predictions that global oil supply will flip into a supply surplus next year. Oil price wrote that, “current demand seems to be rather healthy, according to ANZ. The bank said, as quoted by Reuters, in a note this week that, “Crude oil prices edged higher as tightness in the physical market offset bearish sentiment on demand. Buyers in the physical market have been particularly active, with any available cargoes being snapped up quickly.”
At the same time geopolitical risk factors continue to be strong. Overnight there were reports that, “The Houthi attack Two U.S. Destroyers Leaving the Red Sea, Pentagon Says – USNI News
Iran’s oil minister says all necessary measures have and will be taken should the new Trump admin crank up the pressure on Iran. “Our oil industry colleagues know what measures to take in the event of any conditions/restrictions that may come.”
President-elect Donald Trump’s transition team has prepared executive orders to withdraw for a second time from the climate treaty that commits countries to reducing greenhouse gas emissions. “We are supporters of the Paris agreement. We are supporters of the methane rule,” Cheniere Vice President Anatol Feygin said, referring in the latter case to the European Union’s methane limits on oil and gas imports that would be placed on U.S. LNG beginning in 2030. Cheniere has invested over $45 billion in building LNG facilities and it believes that reducing emission will ensure natural gas plays an important role in the energy transition, said Feygin.

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Crude Oil Struggles Below Key Levels in Bearish Downtrend
By: Bruce Powers | November 12, 2024

• Crude oil remains in consolidation below key support levels, signaling the potential for a bearish continuation if prices break below the September low.

Crude oil remained under pressure on Tuesday as it fell a little below yesterday’s low of 68.18, to a new pullback low of 68.00. It looks like crude will end the day in a bearish position, either closing below Monday’s low or at least in the lower quarter of the day’s trading range. Crude oil remains in a developing consolidation pattern following the breakdown from a large symmetrical triangle pattern in early-September. And it remains below resistance at the lower boundary line of the pattern.



Consolidation Range Lowers Volatility

This means that until it breaks out of the range and stays out of it, crude will continue to consolidate. Support around 67.11, from a downswing on October 1, can be used as the lower end of the price range as a break below it is bearish. On the upside, the 73.26 swing high from last week provides an obvious resistance boundary. A breakout in either direction should see a clear pickup in momentum to stay valid.

Upside Breakout Above 79.09

A rise through the top of the range leads to the 61.8% Fibonacci retracement at 74.60. Slightly higher will be the bottom side of the triangle and potential resistance. Considering price structure, the recent swing high of 79.09 will need to be exceeded to identify a potential change in direction for crude oil. On the downside, a decline below 67.11 signals a likely retest of the September low of 65.65, and possibly lower prices from there.

That low is from October and a drop below it is a bearish monthly indication. Keep in mind that a drop below 65.65 signals a bearish continuation of the decline that began on the triangle breakdown. The October swing high provided a new lower swing high that also shows further downward pressure on the price of crude oil. An internal downtrend line reflects the shift.

Remains in Long-term Downtrend

Crude oil has been progressing in a downtrend since the 95.50 peak in September 2023. The recent low in September and the swing high in October show a continuation of the bear trend. Therefore, a decline below the low in September at 65.65, will trigger a bearish trend continuation signal. That pattern progression will be in concert with the bearish breakdown of the symmetrical triangle.

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Natural Gas Nears Breakout as Bullish Momentum Builds
By: Bruce Powers | November 12, 2024

• Natural gas surged to 3.01 before retreating, signaling potential consolidation before a confirmed breakout, as momentum builds from recent trend developments.

Natural gas hit a new trend high of 3.01 on Tuesday before pulling back. The initial advance triggered a bullish breakout above the top line of a large symmetrical triangle formation. However, following the new high sellers took back control and drove the price of natural gas back down and into yesterday’s trading range, where it remains at the time of this writing. Therefore, natural gas is set to close weak today, in the lower third of the day’s trading range.



Inside Week Breakout Triggered

A bullish breakout from an inside week triggered yesterday on a move above 2.82. Then today, an attempted breakout from a symmetrical triangle pattern occurred. Notice that the purple 20-Day MA has turned up and is moving further away from the 50-Day MA showing improved momentum.

The 20-Day line is potential support during a deeper pullback, along with the 50-Day MA at 2.66. Although it is starting to look like natural gas wants to go higher, it may not occur before a period of consolidation. This would allow demand to stack up as market participants await the potential symmetrical triangle breakout.

Triangle Breakout Triggers Above 3.02

An upside breakout of the triangle will be indicated on a rally the 3.02 swing high and then confirmed by a daily close above that high. That high is part of the price structure of lower swing highs that occurred after 2023 peak. A decisive rise above it will trigger a breakout of the triangle and provide a trend continuation signal for the rising trend that began from the August low.

Target Zone from 2.35 to 2.45

There is an initial potential upside target that has been identified on the chart from 2.35 to 2.45. Nonetheless, an earlier target from a nearby rising ABCD pattern (green) shows an initial target at 3.22 and a secondary target that is with the target zone. You can see on the chat that there are three rising ABCD patterns, each assessing a different portion of the swings. Once a second swing from (CD) matches the price change in the first leg up (AB), there is price symmetry and a potential pivot. As with all pivots, resistance may follow, or a bull breakout indicates a continuation.

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Parting Gift. The Energy Report
By: Phil Flynn | November 11, 2024

As a parting gift to Americans the Biden administration added billions to the deficit because of their misuse of the Strategic Petroleum Reserve. As oil gives up early gains on another pop in the dollar and weak demand data for China, traders are still scratching their heads about the fuzzy math provided by the Biden administration. They are suggesting that they are going to leave office with 180 million barrels of the Strategic Petroleum Reserve replaced that they had depleted.

Yet it won’t be filled by real barrels of oil because the Biden administration did not have the funding to buy back that oil. No, it will be filled by canceling congressionally mandated sales of 140 million barrels of SPR oil through 2027 that was supposed to be sold in order to reduce our trade deficit. The Biden administration brags that they made money by buying back 59 million barrels after the 2022 sale at an average price of less than $76 a barrel, far lower than the $95 a barrel it sold oil in 2022. That resulted in a profit of about $3.5 billion, the DOE said. Yet the money that they were going to net from future sales will be picked up by the taxpayer and the SPR will have less to use during an emergency.

Oil is also getting a bump from the Trump Peace dividend. The surge in the dollar is from the confidence about the outlook for the US Economy under Trump. We are seeing record highs in stocks and Bitcoin.

The FT reported that, “Qatar has told the leaders of Hamas to leave the country following pressure from Washington, in a significant shift in policy by the Gulf state. The request was made around 10 days ago after intense discussions with US officials, according to one person familiar with the matter.

Fox News reported that, “President-elect Trump’s transition team would not confirm or deny that the 2024 election victor told Russian President Vladimir Putin not to escalate the war with Ukraine during a call last week. The Washington Post reported that Putin and Trump spoke on Thursday, marking the first conversation between the two leaders since Trump won his way back into the Oval Office last Tuesday. Trump reportedly took the call from Florida and advised Putin to not escalate the war in Ukraine. The president-elect also reminded Russia’s president about the amount of U.S. military in Europe, a person familiar with the call who spoke on anonymity told the publication.

Strength in the dollar is waining. We should see a sold support area near 6750 and that should be a potential low for the month. Reuters wrote that, “A stronger dollar makes greenback-denominated commodities such as oil more expensive for holders of other currencies and tends to weigh on prices. In China, consumer prices rose at the slowest pace in four months in October while producer price deflation deepened, data showed on Saturday, even as Beijing doubled down on stimulus to support the sputtering economy.

Crack spreads are solid in both gas and diesel. With product supply below normal we will need some refiner’s incentive.

Natural gas may have finally bottomed as winter may be on the way! With natural gas production falling and demand rising, the shorts are covering. The EIA showed that according to data from S&P Global Commodity Insights, the average total supply of natural gas fell by 1.1% (1.2 Bcf/d) compared with the previous report week. Dry natural gas production decreased by 1.3% (1.4 Bcf/d) to average 101.8 Bcf/d, and average net imports from Canada increased by 2.2% (0.1 Bcf/d) from last week.

Yet the EIA reported that total U.S. consumption of natural gas rose by 2.7% (2.0 Bcf/d) compared with the previous report week, according to data from S&P Global Commodity Insights. Natural gas consumed for power generation rose by 2.1% (0.7 Bcf/d) week over week. Consumption in the industrial sector increased by 0.9% (0.2 Bcf/d) and in the residential and commercial sector by 6.3% (1.1 Bcf/d). Natural gas exports to Mexico decreased 5.7% (0.3 Bcf/d). Natural gas deliveries to U.S. LNG export facilities (LNG pipeline receipts) averaged 12.7 Bcf/d, or 0.8 Bcf/d lower.

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Natural Gas Tests Triangle Resistance, Bullish Breakout in Sight
By: Bruce Powers | November 11, 2024

• Natural gas nears a key breakout level, challenging resistance in a symmetrical triangle. A decisive close above 3.02 could confirm bullish momentum.

Natural gas broke out of last week’s price range on Monday with a decisive advance above 2.82. Further, the recent high of 2.92 was exceeded to the upside and it is possible that today may close above that price level. Trading remains strong at the time of this writing and continues near the highs of the day. The low for the day was 2.77.

Today’s high of 2.96 tested resistance around the top boundary line of a large symmetrical triangle pattern. Watch closely to see if natural gas can break through the line towards the recent swing high of 3.02. That high is part of lower swing highs that met resistance following the 2023 peak.



Potential Triangle Bull Breakout

As of today, there is a potential bull breakout of a symmetrical triangle formation approaching. A rise above the top line will provide an initial sign of a potential breakout. However, since the swing high of 3.02 is not too much higher, a decisive advance above that price level should provide a more reliable bullish signal as it will further confirm strength. A trendline break alone generally needs further confirmation for greater validation.

Price Structure Targets

Let’s look at a couple ways to consider upside targets. First, previous price structure marks potential resistance. Each prior swing high within the triangle pattern identifies a potential resistance zone as it was an area of resistance in the recent past as the triangle formation evolved. The swing high of 3.02 is followed by the peak from June at 3.16. Next up is the swing high from January at 3.39, followed by the 2023 peak at 3.64.

Price Symmetry Targets

Then, price symmetry is analyzed looking for potential pivots where there is a match between swings, A pivot area could lead to a pullback or a breakthrough. There are three rising ABCD patterns shown on the chart to highlight price symmetry. The largest pattern is shown in orange, and it begins from the April swing low (A).

Since it is the largest pattern as it covers the longest time frame, it identifies the potentially more significant price target, which is 3.45. The next rising ABCD pattern is in purple, and it points to a potential pivot at 3.35. A more recent and therefore smaller rising ABCD pattern in green points to a potential initial pilot of 3.22 for natural gas once a sustained breakout of the triangle occurs.

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WTI Crude Oil CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | November 9, 2024

• Following futures positions of non-commercials are as of November 5, 2024.

WTI crude oil: Currently net long 194.3k, up 52.2k.



On Sunday, OPEC+ member countries agreed to delay a planned December output increase by one month. West Texas Intermediate crude in that session rallied to reclaim the 50-day moving average ($70.57), which was then breached by Friday, albeit slightly. For the week, the crude rose 1.3 percent to $70.38/barrel; oil bulls nonetheless were unable to hang on to all the gains, as WTI ticked $72.88 intraday Thursday.

For months, WTI played ping pong between $71-$72 and $81-$82. The range support was lost early September. Since then, for the most part, the support-turned-resistance has held. Immediately ahead, risks have risen that WTI gravitates toward $66-$67, which has found buyers for the past couple of months, with the crude ticking $65.27 on September 10.

In the meantime, US crude production in the week to November 1 was unchanged for four consecutive weeks at 13.5 million barrels per day – a record. Crude imports increased 265,000 b/d to 6.2 mb/d. Stocks of crude, gasoline, and distillates all rose as well – respectively up 2.1 million barrels, 412,000 barrels and 2.9 million barrels to 427.7 million barrels, 211.3 million barrels and 115.8 million barrels. Refinery utilization firmed up 1.4 percentage points to 90.5 percent.

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NY Crude Oil Futures (CL) »» Weekly Summary Analysis
By: Marty Armstrong | November 9, 2024

The NY Crude Oil Futures closing today at 7038 is immediately trading down about 1.77% for the year from last year's settlement of 7165. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. Currently, this market has been rising for this month going into November reflecting that this has been only still, a bullish reactionary trend.

Up to now, we still have only a 1 month reaction rally from the low established during September. We must exceed the 3 month mark in order to imply that a trend is developing.

ECONOMIC CONFIDENCE MODEL CORRELATION

Here in NY Crude Oil Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2009 and 2001 and 1998 and 1994. The Last turning point on the ECM cycle high to line up with this market was 2022 and 2018 and 2011 and 2000.

MARKET OVERVIEW
NEAR-TERM OUTLOOK

The historical broader tone of the NY Crude Oil Futures has been a bearish consolidation following the high established back in 2008. Since then, this market has created 2 reaction highs which have been unable to break this overall protracted bearish consolidating trend. Still, the major low was made in 2023 and the market has bounced back for the last year. The last Yearly Reversal to be elected was a Bullish at the close of 2023.

This market remains in a positive position on the weekly to yearly levels of our indicating models. Nevertheless, it closed last year on the weak side down from 2022. Pay attention to the Monthly level for any serious change in long-term trend ahead.

The perspective using the indicating ranges on the Daily level in the NY Crude Oil Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 7081 and support forming below at 7013. The market is trading closer to the support level at this time.

On the weekly level, the last important high was established the week of October 7th at 7846, which was up 4 weeks from the low made back during the week of September 9th. We have been generally trading up for the past week from the low of the week of October 28th, which has been a move of 9.232%. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 7846 made 4 weeks ago. Still, this market is within our trading envelope which spans between 5894 and 8410.

Looking at this from a broader perspective, this last rally into the week of October 7th reaching 7846 failed to exceed the previous high of 8016 made back during the week of August 12th. That rally amounted to only eight weeks. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 6817. Additional support is to be found at 6695. Looking at this from a wider perspective, this market has been trading up for the past 8 weeks overall.

INTERMEDIATE-TERM OUTLOOK

YEARLY MOMENTUM MODEL INDICATOR

Our Momentum Models are declining at this time with the previous high made 2021 while the last low formed on 2023. However, this market has declined in price with the last cyclical low formed on 2023 warning that this market remains weak at this time on a correlation perspective declining in both price and Momentum.

Looking at the longer-term monthly level, we did see a correction from the key high of April for five months. Since that low, however, we have consolidated for 1 month. Meanwhile, the past month has witnessed a rally of 6.11% percent. A month-end closing below 6633 will warn that the market is losing its upward momentum and should retest support below. It will take generally a monthly closing above 7846 to maintain a near-term upward rally.

Some caution is necessary since the last high 8767 was important given we did obtain two sell signals from that event established during April. That high was still lower than the previous high established at 9503 back during September 2023. Critical support still underlies this market at 6760 and a break of that level on a monthly closing basis would warn of a further decline ahead becomes possible. Nevertheless, at this time, the market is still weak.

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Natural Gas Poised for Weekly Breakout
By: Bruce Powers | November 8, 2024

• Natural gas consolidates near highs, with support between 2.58 and 2.51, setting up for a potential bullish breakout above 2.82 in the coming week.

Natural gas is ending the week on Friday with further consolidation in the top half near the highs of Monday’s strong bullish key reversal day. Although the 2.82 to 2.64 price range is contained roughly in the top half of Monday’s trading range, reflecting underlying strength, today’s close may be the lowest closing price of the past five days.

In addition, notice the bearish tails for today and the past two days, as well as the weak closing prices, in the lower third of the trading range for each day. While this may lead to a deeper pullback, the bullish key reversal day from Monday, that was rejected from the 20-Day line earlier in the session (a clue), indicates that demand in natural gas is improving.



Support from 2.50 to 2.55

Near-term potential support is around 2.58 to 2.55, consisting of a prior interim high and the 20-Day MA, respectively. Also, a weekly low is at 2.51 along with the 50-Day MA at 2.53. So, in summary there is a potential support zone from 2.58 to 2.51, while a drop below this week’s low could lead to an even deeper pullback.

Formed an Inside Week

This week will end with an inside week for natural gas. Therefore, a potential weekly bullish breakout will be set up for next week. A rise above the week’s high of 2.82 will signal the breakout, while a drop through the low of 2.51 may lead to a deeper retracement.

Given the price structure for natural gas, the expectation is for an eventual upside breakout. One reason is that last week triggered a bullish weekly reversal from a retracement low. But this doesn’t mean the lower price won’t be tested before a bullish breakout. Nonetheless, the market will signal based on its reaction to price levels.

Signs of Strength Begin Above 2.75

Earlier signs of strength will first be indicated on a rise above today’s high of 2.75, and then each daily high for this week starting with Tuesday. Notice that there are four days in a row where the high price for the day was lower than the prior day. Nevertheless, a breakout above the weekly high, or swing high of the daily chart, will provide a more convincing bullish signal, that may subsequently lead to an upside breakout from a large symmetrical triangle pattern.

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Peace Dividend. The Energy Report
By: Phil Flynn | November 8, 2024

Global markets are soaring on anticipation of the return of President Trump but also on the possibility of peace between Russia and Ukraine. The quagmire between Russia and the Ukraine has cost US taxpayers at least 178 billion dollars and until Donald Trump became President-elect there was little hope that the killing would be coming to an end.

Both President Trump and Russian President Vladimir Putin are ready to discuss Ukraine and while the talks will be difficult, there is a ray of hope for peace that seemed non-existent under the current administration. The Associated Press reported Putin on Trump said, “His behavior at the moment of an attempt on his life left an impression on me. He turned out to be a brave man. Putin said that Trump’s desire to restore relations with Russia and to help end the Ukrainian crisis, “in my opinion, deserves attention at least.”

The Wall Street Journal on the other hand is signaling that President Trump will reinstate the successful maximum pressure campaign on Iran. The Journal writes that Donald Trump plans to drastically increase sanctions on Iran and throttle its oil sales as part of an aggressive strategy to undercut Tehran’s support of violent Mideast proxies and its nuclear program.

This is welcome news and good for world peace. As we know the Biden administration’s policies of easing pressure on Iran had disastrous consequences for peace. Iran saw their revenues increase by billions of dollars under Biden and that meant of course that they were able to fund terror groups such as Hezbollah Hamas and the Houthi rebels. A lot of the tension in the Middle East can be directly tied to the fact that Iran was able to use its influence to cause the war between Hamas and Iran and allowed the Hothi rebels to disrupt shipping in the Red Sea and for Hezbollah to continue their terrors in Lebanon.

The stock market rally is also because of the threat of raising the corporate tax and taxing unrealized gains is off the table.

Yet oil is down a bit on concerns that China is not doing enough to inspire oil demand. Downward price pressure also came from data showing crude imports in China, the world’s largest oil importer, fell 9% in October – the sixth consecutive month to show a year-on-year decline. Reuters reported that, “Investors hoping China would announce extra fiscal buffers for an economy girding for another Donald Trump presidency were disappointed on Friday. China’s top legislative body, the standing committee of the National People’s Congress (NPC), did as was expected, approving bills to allow local governments to allocate 10 trillion yuan ($1.40 trillion) towards reducing off-balance sheet, or “hidden”, debt.

Wind Swept! Bloomberg News reports in a must read that, “Europe’s power prices soared to levels last seen during the energy crisis this week. Only it wasn’t a war or other geopolitical events that caused it, but the dark, windless weather that is all too common during winter. The continent has rapidly expanded its capacity to generate wind and solar power, but still relies on costly hydrocarbons as a back up. For instance, while Germany gets more than 49 gigawatts of wind power on the gustiest days, only around 1% of that record was being generated on Wednesday, with expensive fossil fuels plugging the gap. The “Dunkelflaute” phenomenon — known in power markets by the German word for periods when little to no solar or wind energy can be produced — poses a significant issue for energy infrastructure that relies on renewables.’ Did Gavin Newsome read this?

Natural gas is up as Hurricane Rakel still is impacting production. The BSEE reports that BSEE estimates that approximately 22.36% of the current daily oil production and 9.73% of the current daily natural gas production in the Gulf of Mexico has been shut-in. The production percentages are calculated using information submitted by offshore operators in daily reports. Fox Weather reports that, “Powerful Hurricane Rafael has strengthened in the Gulf of Mexico after slamming into Cuba as a major hurricane on Wednesday and continues to crawl westward slowly. Rafael is currently a Category 3 hurricane with some fluctuations in intensity possible on Friday, the National Hurricane Center said. By the evening, a steady weakening trend is forecast and should continue through the weekend.

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Crude Oil Eyes Breakout as Key Resistance Holds at 73.27
By: Bruce Powers | November 7, 2024

• Despite a failed breakout attempt at 73.21, crude oil shows resilience with key support levels holding, hinting at potential upside on a second try.

Crude oil has been attempting to break through a resistance zone with a high of 73.21 the past couple of days and it did so again on Thursday. Today’s high was a 17-day high. The 73.21 level is from the 50% retracement of the previous downswing, while today’s high was 73.27. Although not a breakout above the 50% level, it is an initial attempt to rise above an interim swim high of 73.15 from October 24.

That high is part of the price structure of the recent downswing. A rise above it, followed by a daily close above, would provide a sign of strength. Instead, today’s breakout attempt is showing signs of failure as the sellers took back control for the day after resistance was hit at 73.21, at least for the near-term.



Signs of Strength

Signs of strength in the price behavior of crude oil have been seen recently. Both the 20-Day and 50-Day MAs were reclaimed this week, and each day crude has closed above the line since. Further, it looks likely that today will be the fourth day in a row where the day ended above those two moving averages. Also, notice that the two lines recently converged and identified a similar price at the breakout day and since then. This doesn’t happen all the time but when it does it can identify a more significant pivot level.

Wednesday’s low of 70.15 is near-term support. A break below it will signal weakness and likely be followed by a move lower. Last Friday’s low at 69.87 can also be watched for Friday, as it also marks where the two trendlines cross. Although today’s breakout failed to progress, it shows strength as yesterday’s high was exceeded thereby providing a higher daily high, and today’s low of 71.05 is a higher daily low relative to yesterday.

A decisive breakout above today’s high may be successful in seeing a rise to higher price levels. If a breakout is sustained the 61.8% Fibonacci retracement points to the next target, followed by a price zone from 76.58 to 76.72. That zone is the 78.6% retracement level and previous interim swing high, respectively.

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Natural Gas Eyes Breakout as Support Holds and Trend Strengthens
By: Bruce Powers | November 7, 2024

• Despite consolidation, natural gas shows bullish signs, with the inside week pattern likely, suggesting a possible breakout rally toward the 3.35–3.45 target zone.

Natural gas continued to consolidate on Thursday within a relatively tight price range. The range is defined by the high and low of Tuesday at 2.82 and 2.65, respectively. Given that there has been no upside follow-through from Monday’s wide-range key reversal day that bounced from a test of support at the 20-Day MA, maybe natural gas drops a little lower first. Also, notice that Wednesday ended with a weak close, in the lower half of the day’s trading range, and today is set to be the same.



If a deeper pullback occurs, then the key near-term support range to watch is from the recent interim swing high of 2.58 and the 20-Day MA at 2.545. Then, there is this week’s low, and the low of the key reversal day at 2.51, as well as the 50-Day MA at 2.52.

Possible Inside Week

Nonetheless, there is only one more trading day to the week and therefore natural gas will likely end the week with an inside week pattern. The high and low of the week will provide the pivot levels to watch heading into next week. Currently, the high for the week was 2.82 and the low was 2.51. Since natural gas has been increasing the number of bullish indications, the expectation is for an eventual upside breakout.

For example, the recent downswing the reversed from 2.21 support was a successful test of support at the 200-Day MA. In addition, once the swing low was established a new internal trendline shows the angle of ascent for the short-term advance, which has noticeably increased from the prior lower uptrend line.

Symmetrical Triangle Breakout May Be Getting Closer

The inside week pattern has the potential to see a strong breakout to the upside and begin a rally that triggers a breakout of a large symmetrical triangle pattern. The recent swing high of 3.02 is part of the swings that define the pattern. A breakout above there will trigger a breakout of the triangle, and a continuation of the rising trend that has delivered a higher swing low (C) but not yet a higher swing high. If natural gas can continue to strength following a breakout, then it has a chance at the first target zone from 3.35 to 3.45.

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The Energy Report. Laying Down the Hammer
By: Phil Flynn | November 7, 2024

Anyone who thought that President elect Trump would waste anytime laying down the hammer on Russia and Iran, well it’s time to think again. Reports are circulating that not only will the incoming Trump Administration take the novel approach of actually enforcing sanctions on Iran but also unleashing a new round of sanctions on Russia, Russia, Russia in what may be the “art of the deal” persuasion move to end the senseless killing in the Russia Ukraine War.

In fact already Russian President Vladimir Putin said he takes Donald Trump’s plan to end the war with Ukraine very seriously and Russia supports it. Yet those that propagate the war say that you can’t negotiate with Putin and the only way to settle this is to continue the quagmire, spend billions on weapons and continue the killing.

Yet new sanctions in Russia and enforcing the old sanctions on Iran does rase the risk of higher oil prices in the short term. That is something that will not please President Trump. My assumption is that President Trump will use his good relationship with Saudi Crown Pince Mohammed bin Salman Al Saud to make sure that OPEC steps up to the plate and makes up for any supply shortfall.

All oil traders knew that President Trump was very successful in persuading Saudi Arabia and OPEC to increase oil production in the past, sometime with a gentle nudge or one of those nasty tweets. As I wrote at the time I did not know that you could tweet more oil out of the ground. I guess I was wrong.

President Trump also saved the US oil and gas industry by successfully ending the oil production war between Saudi Arabia and Russia. It was a war that led to an oil price crash when covid hit, driving futures of WTI into negative territory.

Trump also helped producers by allowing them to store oil in the SPR until the market stabilized saving many US oil and gas producers from bankruptcy and at the same time saving high paying union energy jobs. No wonder the rank-and-file union workers support the President elect. He saved jobs in the energy industry as opposed to the Biden administration that eliminated energy jobs. Mainly with the Keystone Pipeline but also with regulation and discouraging investment in US oil and gas projects.

Biden promised to replace those jobs with ‘green energy’ jobs but that never happened. And the jobs that were created did not pay as well as the jobs that were replaced. Of course, that was not a problem in China where they don’t have the same pay worries for the green energy jobs that Biden helped create for them.

Sadly during that time Senator Chuck Schumer and the democrats killed a plan that Trump had to refill the SPR at the historically low oil price near $24.00 a barrel. He said at that time that he did not want to bail out US OIL and gas companies. No wonder democrats are losing their union base. Maybe because their policies are costing union worker jobs and an empty promise of creating new ones.

Also, in the short term there will be less incentive to short oil because, let’s face it, the election is finally over. Also, we will need more jet fuel as celebrities will be flying their private jets as they make good on their promises to leave the country because Donald Trump was elected.

The weekly oil inventories for the week were less than inspiring but as we are in the middle of shoulder season, that is not that much of a surprise. The real surprise is that if you look at the four-week moving average for demand, it was well above the average last week but fell below average. The Energy Information Administration (EIA) reported that, “Demand for all petroleum products averaged 20.6 million barrels a day, down by 1.5 from the same period last year. Gasoline demand averaged 8.9 million barrels a day, down by 1.5% from the same period last year. Distillate fuel demand averaged 3.9 million barrels a day over the past four weeks, down by 5.1% from the same period last year. Jet fuel products supplied were down 1.5% compared with the same four-week period last year. That should pick up with the Hollywood celebrity exodus.

Supply though is below average. The EIA reported that, “U.S. commercial crude oil inventories increased by 2.1 million barrels from the previous week. At 427.7 million barrels, U.S. crude oil inventories are about 5% below the five-year average for this time of year. Total motor gasoline supply increased by 400,000 barrels from last week and are about 2% below the five-year average for this time of year. Distillate fuel inventories increased by 2.9 million barrels last week and are about 6% below the five-year average for this time of year.

The Fox Weather Channel warned us and already we are seeing Hurricane Rafel shut down Gulf of Mexico production. The Bureau of Safety and Environmental Enforcement has activated its Hurricane Response Team and reports that based on data from offshore operator reports submitted as of 11:30 a.m. CDT today, personnel have been evacuated from a total of 11 production platforms, 2.97% of the 371 manned platforms in the Gulf of Mexico. Personnel have been evacuated from one non-dynamically positioned (DP) rig, equivalent to 16.6% of the six rigs of this type currently operating in the Gulf. A total of one DP rig has moved off location out of the hurricane’s path as a precaution. This number represents 4.7% of the 21 DP rigs currently operating in the Gulf. From operator reports, BSEE estimates that approximately 17.4% of the current oil production and 7.04% of the current natural gas production in the Gulf of Mexico has been shut-in.

Fox Weather reports that Hurricane Rafael is forecasted to meander Gulf of Mexico after lashing Cuba with powerful winds, flooding rain. That is not good for bringing production online. Download the Fox Weather Ap to get the latest.

Fed Day will keep us on edge but there is strong support under $70. If you get a chance position there.

We also get the EIA natural gas report. Anthony Harrup at the Wall Steet Journal writes that, “U.S. natural gas inventories likely increased by more than usual last week as milder-than-normal autumn temperatures limited demand, according to a survey by The Wall Street Journal.

Natural gas in underground storage is expected to have risen by 64 billion cubic feet to 3,927 Bcf in the week ended Nov. 1, according to the average estimate of nine analysts, brokers and traders. Estimates range from an injection of 47 Bcf to an injection of 76 Bcf. The storage build would be larger than the five-year average for the week of 32 Bcf, and increase the surplus over the five-year average to 210 Bcf from 178 Bcf the week before. The U.S. Energy Information Administration is scheduled to report weekly natural gas storage data on Thursday at 10:30 a.m. EST.

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Commodities Daily Market Movers (% Price Change)
By: Marty Armstrong | November 7, 2024

• Top Movers

Palm Kernel Oil 7.51 %
US - Dow / Gold Ratio 6.38 %
Tokyo Rubber Futures 3.66 %
Soybean Oil CBT Futures 3 %
NY Natural Gas Futures 2.88 %

• Bottom Movers

NY Copper Futures 5.12 %
NY Copper Spot 5.12 %
NY Silver COMEX Futures 4.41 %
London Zinc Spot 4.38 %
Zinc (99.995%) Futures 4.2 %

*Close from the last completed Daily

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Natural Gas Poised for Bullish Breakout with Key Resistance Ahead
By: Bruce Powers | November 6, 2024

• Demand for natural gas remains strong; breaking 2.92 resistance could indicate a bullish continuation with targets reaching 3.35 to 3.45.

Natural gas traded inside the prior day’s range on Wednesday, and it is set to close positive for the day. This follows yesterday’s pullback from a 2.82 high made earlier in the day that had the potential of leading to a deeper pullback. Today’s price action shows support and underlying demand for natural gas. Whether that leads to a bullish continuation above yesterday’s high or a deeper retracement is unclear.

Certainly, following Monday’s key reversal day, strong close, and a successful test of the 200-Day MA, demand may spike again. A rest following Monday’s sharp advance is healthy for the rising trend.



Rise Above 2.82 Triggers Bullish Continuation

Today’s high of 2.80 shows near-term resistance and it is followed by yesterday’s high and a trend high of 2.82. A decisive breakout above the higher level is needed to trigger a continuation of the rising trend. If that high is not exceeded this week, the week will likely end as an inside week unless this week’s low of 2.51 fails to maintain support. Notice that both yesterday and today’s price range is largely located in the top half of Monday’s range. This reflects continued strength. That would start to change on a deeper pullback to below yesterday’s low of 2.65

Possibility of Symmetrical Triangle Breakout

If natural gas can rise above 2.82 and stay above it the next challenge is potential resistance around the top trendline that marks the upper boundary of a large symmetrical triangle pattern. The rising slope of the lower boundary line reflects improving underlying demand. It initially began from the February trend low. But once a higher swing low was established in August the slope of the line increased.

Rise Above 2.92 Signals Bull Breakout of Triangle

A rise above the top line will indicate a potential bull breakout of the triangle formation. However, recent swing highs at 2.92 and 3.02 should provide more reliable price levels to signal a breakout that may be sustainable. A more significant sign of strength would be given on a move above the 3.16 swing high from June. Initial targets look to be in a range from 3.35 to 3.45. It consists of the completion of a rising ABCD pattern (purple) at 3.35, the peak from January, and the first target from a larger ascending ABCD pattern (orange) at 3.45.

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Crude Inventories Rise By 2.1 Million Barrels, Exceeding Analyst Expectations
By: Vladimir Zernov | November 6, 2024

• Domestic oil production remained unchanged at 13.5 million bpd.
• Strategic Petroleum Reserve increased from 385.8 million barrels to 387.2 million barrels.
• Oil prices moved higher as traders reacted to the EIA report.

On November 6, 2024, EIA released its Weekly Petroleum Status Report. The report indicated that crude inventories increased by 2.1 million barrels from the previous week, compared to analyst consensus of +1.8 million barrels. At current levels, crude inventories are about 5% below the five-year average for this time of the year.

Total motor gasoline inventories increased by 0.4 million barrels, compared to analyst forecast of -1.2 million barrels. Distillate fuel inventories grew by 2.9 million barrels from the previous week.

Crude oil imports increased by 265,000 bpd, averaging 6.2 million bpd. Over the past four weeks, crude oil imports averaged 6.0 million bpd.

Strategic Petroleum Reserve increased from 385.8 million barrels to 387.2 million barrels as U.S. continued to buy oil for strategic reserves.

Domestic oil production remained unchanged at 13.5 million bpd. Rising U.S. domestic oil production has served as a bearish catalyst for oil markets in recent months.

WTI oil moved higher as traders reacted to the EIA report. Currently, WTI oil is trying to settle above the $72.30 level. Oil markets have been volatile today as traders reacted to Trump’s victory.

Brent oil climbed above the $75.50 level after the release of the EIA report.

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Crude Oil Can Momentum Be Sustained Above Key Moving Averages?
By: Bruce Powers | November 5, 2024

• Crude oil’s rally from recent lows tests resistance, with potential for a breakout above key levels if support at 71.58 holds.

Crude oil continued its advance from the October 29 swing low on Tuesday as it reached a new high of 73.12 before encountering resistance. Today’s rally follows strength from Monday, where both the 20-Day (purple) and 50-Day (orange) MAs were reclaimed, and the day closed above those levels. The high today tested resistance at the combination of the 50% retracement and the most recent interim swing high at 73.15.

That swing high is part of the near-term price structure of a downtrend and therefore it provides clues as the high needs to be exceeded for the five-day rally to keep going. Otherwise, resistance may further stop the ascent and lead to a turn back down and a possible test of support around recent lows.



Closing Above Moving Averages is Bullish

\A reclaim of the moving averages is a bullish sign but only if crude can stay above them. Currently, and interestingly, the two moving averages have converged to identify a tight price support area from 71.58 to 71.61. When that happens, a potentially more significant pivot area may be identified. Also, notice that strength was seen recently as the 20-Day line crossed back above the 50-Day line. If the moving averages can continue as support, there is the potential for a continuation upward. However, if the price of crude oil falls below each, it will be a sign of weakening with a daily close below signaling further weakness.

Initial Upside Potential to 70.78

Let’s consider the initial upside if crude can continue to strengthen. A bullish breakout is triggered on a decisive rally above the 73.15 interim swing high and then confirmed with a close above it. That would trigger a bullish reversal in crude that should see prices rise further.

The 61.8% Fibonacci retracement is subsequently at 74.60 and it shows the next higher likely target, at a minimum. That level is also close to potential resistance around the lower boundary line of a large symmetrical triangle consolidation pattern. Nevertheless, if crude can continue to rise from there it has the potential to breakout through the top of the triangle towards 70.78 (D). That price completes an initial target for a rising ABCD pattern that incorporates the most recent swing low of 67.33 (C).

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Natural Gas Bullish Patterns Signal Upside Potential
By: Bruce Powers | November 5, 2024

• Natural gas’s pullback after a bullish reversal may lead to upside potential if key resistance levels near 3.02 are cleared.

Following a strong performance on Monday, natural gas sees profit taking on Tuesday and a pullback to a low of 2.65. Nothing unusual and to be anticipated given the sharp bullish key reversal day that completed yesterday with a strong daily close near the highs of the day. Earlier in today’s trading session, a new higher daily high was reached, and it was followed by a pullback. Nonetheless, yesterday’s price action may have been a precursor to additional strengthening.



Bullish Clues

In addition to the bullish key reversal day (open below prior day’s low and close above prior day’s high), the 20-Day MA was successfully tested as support earlier during Monday’s trading session. That was the first test of the line as support since the advance on October 29. Further, notice that support was tested at an initial downtrend line (blue dots) that starts from the 2023 peak and connects with the January swing high from this year. In other words, price levels are being reclaimed and strength is confirmed on a subsequent test of previous resistance as support.

Above 2.92 Triggers Next Breakout

Recent bullish signs point to a potential upside breakout of a large symmetrical triangle pattern in natural gas. An initial upside breakout triggers above the recent high of 2.92. However, a stronger signal would be given on a move above the recent swing high of 3.02, and then above the swing high of 3.16. The first upside target zone following a 3.02 breakout is from 3.35 to 3.45.

That price range begins with an initial target for a near-term rising ABCD pattern (D) in purple. Then, there is a previous swing high where resistance was seen in the past, at 3.39. Finally, the price range ends at 3.45, which is the target from a larger ascending ABCD pattern (orange) that incorporates the August swing low. Since there are several price levels identifying the resistance zone, there is a real potential of it being reached if demand in natural gas continues to strengthen.

Weekly Pause?

On the weekly time frame natural gas is trading inside the price range from last week. It will continue to do so unless there is an upside breakout above last week’s high of 2.92 or a drop below the low of 2.27. Given the relatively large range, it wouldn’t be surprising to see this week complete as an inside week. That would set up a potential inside week breakout for next week.

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Woke Versus Woke. The Energy Report
By: Phil Flynn | November 5, 2024

America goes to the polls as they should contemplate whether the Biden Harris policies has made our country and the world a more peaceful place. Sadly and starting with the disastrous Afghanistan withdrawal, it led to the needless deaths of 13 American service people. The ‘go easy on Iran’ policy has backfired. Unfreezing Iranian assets and not enforcing Iranian oil sanctions raised billions for Iran to fund the terrorist turmoil we have seen in the globe such as the Iranian funded October 7th attack on Israel citizens with unspeakable acts of horrific violence against men, woman and even children. The Russian invasion into Ukraine that could have been avoided with strong leadership but instead was seemingly welcomed by the Biden administration that suggested that a small incursion by Russia into Ukraine might be ok. They also discouraged Ukraine from taking an earlier proposed peace settlement that may have saved over one million lives. And all this world turmoil is a driving force in the oil trade today.

Oil prices got a bid as record options plays in October ahead of the US Election and the growing risk that Iran will attack Israel or Israel may make a promotive strike on Iran. Other players are taking sides as Russia is threatening to give Iran nuclear and chemical weapons if Israel attacks Iran with the help of the United States.

North Korea wants to get in the mix after sending soldiers to fight with Russia in Ukraine while Rocket Man Kim Jong Un is back to shooting missiles to show how tough or deranged he might be. Reuters reported that, “North Korea fired at least seven short-range ballistic missiles on Tuesday off its east coast, Japan’s defense minister said, soon after Pyongyang condemned military drills by its rivals and just hours before the U.S. election.”

Canada wants to raise oil and gas prices as Canadian Prime Minister Trudeau is ordering gas and oil producers to cut their emissions by 35% which means that the cost of energy might go up by 75%. This comes as the fight to reduce carbon emissions gets caught up in a game of Woke Versus Woke after Meta gets stung by the bees! Meta plans to set up a nuclear-powered AI data center in the US have been thwarted because a rare bee species was found on the land according to the Financial Times reports. Meta is facing a problem as they are looking for access carbon-free energy for its AI data centers and nuclear is the only real option.

The FT reported that, “A 2017 report from the Center for Biological Diversity found that there are 347 endangered bee species in North America and Hawaii. It noted that 90% of wild plants require pollinator activity to survive, meaning that disrupting bee habitats could result in not only extinct species but also a loss of plant life, which could further accelerate climate change. It’s probably time for a bigtime celebrity to get on his private jet and fly to Hawaii to stand up for the bees to save the planet.

Mark Zuckerberg for his part will continue to say he is sorry for censoring a Hunter Biden laptop story ahead of the last election.

Is there a growing sense that after the election oil prices have a lot to go on the upside? Global demand is still at record highs so with OPEC pausing their production increase there is an increasing odd of a supply deficit as we head into the end of the year. Even the CEO of British petroleum says that global oil demand is growing much faster than he thought and others have to up their demand estimates going forward.

Ahead of the big election we’re looking for volatility. That is the reason why we’re seeing a lot of option plays. You can play both sides of the market but ultimately this market has a lot of risk to the upside. Hedge funds may have less incentive to push the short side after the election. The AFP reported that net Saudi Aramco reported a 15 percent year-on-year drop in third quarter profit on Tuesday, citing low oil prices. The fall in net income to $27.56 billion this year from $32.58 billion in 2023 “was mainly due to the impact of lower crude oil prices and weakening refining margins”, the firm said in a statement posted to the Saudi stock exchange. But it still paid a record dividend.

Saudi Arabia, currently producing roughly nine million barrels per day (bpd), well below its capacity of 12 million bpd. This reflects a series of output cuts since October 2022. “Aramco delivered robust net income and generated strong free cash flow during the third quarter, despite a lower oil price environment,” chief executive Amin Nasser said in a statement.

Bloomberg reported that he Russian government’s revenue from the oil industry fell by 29% in October from a year earlier due to lower crude prices and higher state payouts to the nation’s fuel producers.

Oil-related taxes, a key source of financing for Russia’s war against Ukraine, shrank to 1.05 trillion rubles ($10.7 billion) last month compared with 1.48 trillion rubles a year ago, according to Bloomberg calculations based on Finance Ministry data published on Tuesday. Total oil and gas proceeds, 86% of which came from oil-production levies and the so-called profit-based tax, fell by more than a quarter to 1.21 trillion rubles.

Natural gas prices are getting a boost from yet another hurricane that could impact production in the Gulf of Mexico. Fox Weather reports, “Tropical Storm Rafael is continuing to strengthen and remains on track to become a hurricane as parts of the Caribbean prepare to be battered by damaging, hurricane-force winds, flooding rain and a dangerous storm surge. The National Hurricane Center said Rafael is situated in an atmospheric and oceanic environment that is “quite conducive for strengthening.” In addition, forecasters say that computer forecast models show there is a “significant chance” that Rafael could rapidly intensify as it approaches the Cayman Islands and Cuba. Download the Fox Weather ap to keep up with this storm.

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3 Oil Stocks to Avoid in November
By: Schaeffer's Investment Research | November 5, 2024

• Options traders have been betting with extremely inflated optimism

• Even analysts are ripe for a round of downgrades on oil

A new month has arrived and after an extremely volatile October that brough a slew of economic data and big-name earnings, it’s time to look at what’s ahead. An underrated storyline this week was crude prices, with West Texas Intermediate (WTI) December-dated contracts plummeting after Israel attacked Iran with an airstrike near crude production facilities. While no damage was incurred that impacted the flow of demand and output, black gold suffered a more than 6% drop on Monday, Oct. 8. Reports surfaced Friday that another attack might be imminent, however, pushing oil futures 2.3% higher by the afternoon. Despite the volatility, oil managed a 1.6% pop for October.

November may not be the best month to invest in oil stocks, though, as data from Schaeffer’s Senior Quantitative Analyst Rocky White indicates the three worst stocks to buy on the S&P 500 next month, historically going back 10 years, are in the oil sector. The oil, gas, and coal sector make up seven of the 25 spots, per the table below. The stocks with the worst average November returns are EQT (EQT), Schlumberger NV (SLB), and Coterra Energy (CTRA), with respective losses (in order) of -3.98%, -1.54%, and -3.03%. Over the past 10 years, the equities have only finished higher 20%, 30%, and 40% of the time, respectively.



Natural gas specialists EQT has been unable to recapture its late-2023 highs above $50. And despite bouncing 20% off its Aug. 5 lows at $30.02, the three-month rally is running right into its 320-day moving average. The shares are also trapped in a downward facing channel stemming from its mid-March highs. That’s a lot of uninspiring technical barriers in the way of a 7.2% 2024 deficit.



Yet options traders have been betting with extremely inflated optimism. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), EQT's 50-day call/put volume ratio of 4.30 ranks in 77th percentile of its annual range. Echoing this, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.42 sits in the lowest possible annual percentile, indicating short-term options traders have never preferred calls more in the last 12 months.

Even analysts are ripe for a round of downgrades, with 12 of 20 covering brokerages sporting a "buy" or "strong buy" coming into Friday. As soon as this bullish sentiment begins to unwind, EQT could be in for a rough winter, no matter what energy prices do.

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Natural Gas Sees Bullish Reversal After Support Test at 2.51
By: Bruce Powers | November 4, 2024

• After testing key support, natural gas surged, establishing a key reversal day that may lead to an upside breakout from the symmetrical triangle.

Natural gas dropped to a new retracement low of 2.51 on Monday and successfully tested support around the 20-Day MA, now at 2.54. Subsequently, buyers took control and drove the price of natural gas higher to take out yesterday’s high of 2.72. At the time of this writing, it had reached a high of 2.79 for the day but continues to trade near the highs of the day and may trade higher before the close. This flip from bearish to bullish in one trading session will likely leave a key reversal day as the open was below yesterday’s low of 2.63 and the close will most likely be above yesterday’s high.



Bullish Reversal From 20-Day MA Area

Since today’s bullish reversal followed a successful test of support around the short-term 20-Day MA trend indicator earlier in the session, the bearish correction should be complete. Notice that today’s low of 2.51 was a little below the 20-Day line and approaching the 50-Day MA along with the 61.8% Fibonacci retracement at 2.48. Further, an original trendline starting from the 2023 peak has been redrawn on the chart as a dotted blue line. Notice that it identified support for today and provides an additional clue pointing to a likely pullback bottom.

Can Strength be Sustained?

The 20-Day MA is a key near-term trend indicator. Since a successful test of support around the line was completed today, the bullish outlook for natural gas has improved. The question now is whether strong demand as seen today can be sustained to eventually challenge the top boundary line of a large symmetrical triangle formation, and possibly break out?

Recently, two attempts to break up through the top line failed and subsequently led to a pullback. The current advance is rising off a successful test of support around the 200-Day MA following a swing low of 2.21, which is bullish behavior. Moreover, the relationship with the 20-Day MA further confirms improving underlying demand.

Rise Above 2.92 Triggers Breakout

A rise above the recent high of 2.92 will trigger the next upside breakout attempt from the triangle consolidation formation. That would indicate that natural gas has risen above the top boundary line of the pattern. Subsequently, there are prior swing highs at 3.02, 3.16, and 3.39. Each marks a potential pivot level where resistance may be seen, or an upside breakout indicates the continuation of strength. Two rising ABCD patterns, one in orange and the other purple, point to potential initial upside targets at 3.35 and 3.45, respectively.

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$WTIC $OIL - Making all the right moves. Tho has yet to recover the 'Bowl' & its Wkly 11/EMA (Ivory)...
By: Sahara | November 4, 2024

• $WTIC $OIL - Making all the right moves.

Tho has yet to recover the 'Bowl' & its Wkly 11/EMA (Ivory)...



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$NATGAS $UNG - Nice Rebound from the low of the 'Coil'
By: Sahara | November 4, 2024

• $NATGAS $UNG - Nice Rebound from the low of the 'Coil'

+6%...



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Cut To the Chase. The Energy Report
By: Phil Flynn | November 4, 2024

Oil prices are surging to begin the week on increasing geopolitical risk and the fact that OPEC is delaying its planned production increase. In real terms the delay of a OPEC production increase really amounts to a OPEC production cut. OPEC cheaters are making good on pledges to cut production to compensate for over production.

OPEC put out a press release that they would wait yet another month before beginning to unwind 2.2 million barrels a day in production cuts. Yet this comes after the Iraqi Ministry of Oil said on Friday that Iraq has reduced its oil production to 3.3 million barrels per day in line with its commitment to the OPEC+ agreement. Oil production in Iraq during September reached 3.94 million barrels per day, less than the country’s OPEC+ output limit of almost four million barrels per day. Kazakhstan’s average daily oil output in October was down 20% from September, two sources familiar with the data said on Friday, complying with the country’s OPEC+ quota, according to Reuters calculations, another sign that cheaters are cutting.

Yet this news comes as Iran won’t go quietly. Hedge funds that bet that the conflict between Iran and Israel on being over will have to recalibrate those bets. An exclusive from the Wall Street Journal reported that, “Iran Tells Region ‘Strong and Complex’ Attack Coming on Israel! Tehran has warned diplomats that it is planning to use more powerful warheads and other weapons!

Hedge funds have suggested that they have been selling oil into the election. That trade may change after the election. Hedge funds taking on massive, short positions may become more dangerous, especially after last week’s data that shows US Petroleum demand at near record breaking 21,689 million barrels a day.

Also, there’s talk about more stimulus in the Chinese economy which means that the dip in Chinese oil demand should start to recover. We’re also seeing incredible growth in Indian oil demand. India of course is going to be the main driver of demand growth on the planet.

Bottom line is it’s getting more dangerous to be short. The US sent some B52 bombers to the Middle East to send a strong message Israel will continue to defend itself if Iran makes the mistake of attacking Israel. There should be an attack on targets that were previously left alone. Oil infrastructure could be a big part of that. Israel has suggested they would wait to see the outcome of the election before making any final decisions. Read that whatever way you want.

Natural gas is desperately seeking winter. The lack of any heating degree days in November’s is putting downward pressure on natural gas even though the outlook for natural gas demand over the next few years looks wildly bullish. In the short term we really need winter to bail out the prolific production that we’ve seen from the United States.

Although we do have a tropical storm development that we may have to keep an eye on for the natural gas market. Fox Weather is reporting that, “Potential Tropical Cyclone 18 to strengthen into Hurricane Rafael as Caribbean braces for strong wind, rain. We may have entered the final month of the 2024 Atlantic hurricane season, but the tropics are showing no signs of cooling down after the National Hurricane Center designated an area of disturbed weather in the Caribbean Sea as Potential Tropical Cyclone Eighteen. Forecasters believe the tropical disturbance could likely develop into Hurricane Rafael in the coming days.

“The disturbance is expected to become a tropical storm (Monday) and pass near Jamaica (Monday night) and Tuesday, where a Tropical Storm Warning is in effect,” the NHC said. “The system is forecast to become a hurricane by Tuesday night and there is a risk of dangerous impacts from hurricane-force winds and storm surge in the Cayman Islands and portions for western Cuba.”

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WTI Crude Oil CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | November 2, 2024

• Following futures positions of non-commercials are as of October 29, 2024.

WTI crude oil: Currently net long 142.1k, down 1.1k.



For nearly two months, West Texas Intermediate crude has gone sideways to potentially build a base at $66-$67, with a high of $78.46 on October 8 and a low of $65.27 on September 10. The crude earlier peaked at $95.03 in September last year.

This week, at Friday’s high of $71.45, the crude would have been only down $0.33 for the week, but sellers showed up just above the 50-day moving average to end the week down 3.2 percent to $69.49/barrel, forming a weekly spinning top.

Friday’s high was also a rejection at a broken, months-long range between $71-$72 and $81-$82. For now, hence, WTI is trapped between $66-$67 and $71-$72.

In the meantime, US crude production in the week to October 25 was unchanged for three consecutive weeks at 13.5 million barrels per day – a record. Crude imports decreased 456,000 b/d to six mb/d. Stocks of crude, gasoline, and distillates all fell – down respectively 515,000 barrels, 2.7 million barrels and 977,000 barrels to 425.5 million barrels, 210.9 million barrels and 112.9 million barrels. Refinery utilization shrank four-tenths of a percentage point to 89.1 percent.

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NY Crude Oil Futures (CL) »» Weekly Summary Analysis
By: Marty Armstrong | November 2, 2024

This market made a new high today after the past 3 trading days. The market opened higher and closed higher. The immediate trading pattern in this market has exceeded the previous session's high intraday reaching 7145. Therefore, this market has rallied over the past 3 trading sessionsNevertheless, this market remains well above all seven of our intial support levels. Meanwhile, this market's closing at this time has been the highest during this 3 day rally. This certainly warns that we can still see higher highs ahead from here. It will take a closing below 6932 to signal a decline is unfolding. Nonetheless, the market remains neutral on our system indicators yet the immediate indicator is positive right now. This market has declined 11% from the last important cyclical high of 7846. Since that last important cyclical high, the market has made lower low of late over the course of the last 1 event.

Up to now, we still have only a 1 month reaction rally from the low established during September. We must exceed the 3 month mark in order to imply that a trend is developing.

ECONOMIC CONFIDENCE MODEL CORRELATION

Here in NY Crude Oil Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2009 and 2001 and 1998 and 1994. The Last turning point on the ECM cycle high to line up with this market was 2022 and 2018 and 2011 and 2000.

MARKET OVERVIEW
NEAR-TERM OUTLOOK

The historical broader tone of the NY Crude Oil Futures has been a bearish consolidation following the high established back in 2008. Since then, this market has created 2 reaction highs which have been unable to break this overall protracted bearish consolidating trend. Still, the major low was made in 2023 and the market has bounced back for the last year. The last Yearly Reversal to be elected was a Bullish at the close of 2023.

This market remains in a positive position on the weekly to yearly levels of our indicating models. Nevertheless, it closed last year on the weak side down from 2022. Pay attention to the Monthly level for any serious change in long-term trend ahead.

The perspective using the indicating ranges on the Daily level in the NY Crude Oil Futures, this market remains neutral with resistance standing at 6964 and support forming below at 6932. The market is trading closer to the resistance level at this time.

On the weekly level, the last important high was established the week of October 7th at 7846, which was up 4 weeks from the low made back during the week of September 9th. We have seen the market drop sharply for the past week penetrating the previous week's low and it closed lower. We are trading below the Weekly Momentum Indicators warning that the decline is very significant and we need to pay attention to the timing and reversals. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 7846 made 3 weeks ago. Still, this market is within our trading envelope which spans between 5746 and 8656.

Looking at this from a broader perspective, this last rally into the week of October 7th reaching 7846 failed to exceed the previous high of 8016 made back during the week of August 12th. That rally amounted to only eight weeks. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action as well as trend. Looking at this from a wider perspective, this market has been trading up for the past 7 weeks overall.

INTERMEDIATE-TERM OUTLOOK

YEARLY MOMENTUM MODEL INDICATOR

Our Momentum Models are declining at this time with the previous high made 2021 while the last low formed on 2023. However, this market has declined in price with the last cyclical low formed on 2023 warning that this market remains weak at this time on a correlation perspective declining in both price and Momentum.

Looking at the longer-term monthly level, we did see a correction from the key high of April for five months. Since that low, however, we have consolidated for 1 month. Meanwhile, the past month has witnessed a rally of 6.11% percent. A month-end closing below 6633 will warn that the market is losing its upward momentum and should retest support below. It will take generally a monthly closing above 7846 to maintain a near-term upward rally.

Some caution is necessary since the last high 8767 was important given we did obtain two sell signals from that event established during April. That high was still lower than the previous high established at 9503 back during September 2023. Critical support still underlies this market at 6760 and a break of that level on a monthly closing basis would warn of a further decline ahead becomes possible. Nevertheless, at this time, the market is still weak.

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Natural Gas Eyes Lower Retracements After 38.2% Fibonacci Test
By: Bruce Powers | November 1, 2024

• Testing support at Fibonacci levels, natural gas remains bearish, with lower targets if current support fails to hold.

Natural gas fell to test support around the 38.2% Fibonacci retracement on Friday, as it dropped to a low of 2.63. The 38.2% retracement was at 2.65. At the time of this writing natural gas continues to trade near the lows of the day and will likely end the day in the bottom half of the day’s trading range, thereby indicating remaining selling pressure. Although a bounce is possible from today’s lows there is little sign of strength so far other than the decline stopped at 2.63. Even if there is a bounce, the expectation is for lower retracement levels to eventually be approached and tested as support.



Bearish Continuation Below 2.63

A decisive decline below today’s low will trigger a continuation of the bearish retracement. Subsequently, there are two primary potential support zones to watch. The first is from 2.58 to 2.54, and the second starts at the 61.8% Fibonacci retracement level at 2.48 and goes down to the orange 50-Day MA at 2.46. The first price zone starts with a prior interim swing high, includes the 50% retracement at 2.56, and completes with the purple 20-Day MA.

Another Test of Support at 50-Day MA May Occur

A recent test of support at the 50-Day line failed, and the price of natural gas fell below the line before rebounding back above it. Therefore, the current decline has the potential to successfully test support around the 50-Day MA and lead to a bullish reversal. One reason for this is indicated on the weekly chart (not shown), as a bullish reversal triggered this week.

Although the moving averages help provide some guide to price action, natural gas continues to trade inside consolidation that takes the form of a large symmetrical triangle pattern. Therefore, indications from the moving averages are generally not as reliable or significant as seen in a trending environment. Nonetheless, keeping that in mind they can still provide useful information as they have done recently with support at the 200-Day MA and the 50-Day crossing above the 200-Day.

Internal Uptrend to Provide Insights

Behavior around the internal uptrend line that connects the most recent swing low may also provide some insight. If it fails to hold as support, the 200-Day MA becomes a target, which is now at 2.23. Subsequently, if the 200-Day MA fails, the trendline becomes a target. If the trendline is broken to the downside, the potential bullish outlook diminishes.

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$WTIC $OIL - Got a turnaround. Yet not recovered the 'Bowl' (esp on the Mthly close) Hope is for the Mthly 150/MA & EMA to hold (Not shown)...
By: Sahara | November 1, 2024

• $WTIC $OIL - Got a turnaround.

Yet not recovered the 'Bowl' (esp on the Mthly close) Hope is for the Mthly 150/MA & EMA to hold (Not shown)...



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$WTIC $OIL - Recovered that 'Expanding' Plot. Yet not convincingly perhaps (Still under its Wkly 252/MA Purple)...
By: Sahara | November 1, 2024

• $WTIC $OIL - Recovered that 'Expanding' Plot.

Yet not convincingly perhaps (Still under its Wkly 252/MA Purple)...



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If I Could Turn Back Time. The Energy Report
By: Phil Flynn | November 1, 2024

If I could turn back time, If I could find a way! The secret to comedy is timing. The same is true and commodity option trading and sometimes buyers are asking if they could turn back time just three and a half minutes because it was the difference between times running out.

And sometimes it is just a matter of minutes or seconds. The end of month call option an option that went worthless that if it has just a little more time would have had reached the stars if a headline that caused an oil price spike would have come out just minutes earlier.

Crude oil had a decent day as it mostly filled the void on the chart after the drop in price after Israel spared Iranian nuclear facilities and OPEC dropped hint that they would cancel but failed to reward those who bought 6950 or 7000 calls that would have been in the money if the market completed the process and traded back to the 7178 pre-Israeli attack close.

Sure, the oil had extremely bullish data in the weekly Energy Information Administration (EIA) report but lacked the momentum to completely fill the gap at the 1:30 central time close.

They did not seem to be aware of the risk that Iran might have the guts to retaliate against Isreal which many experts would be a death wish for the terror backing regime.

Yet just 3 minutes after the 1:30 Central time official settlement price that sealed the fate of the options expiration price, a headline that Iran was preparing major retaliatory strike from Iraq within days.

I am sure the timing of the headline release was just a coincidence.

Yet not surprisingly caused a price spike that filled the gap driving crude back over $7100 leaving some call buyers to ask what might have been if that headline had been released just three minutes earlier.

Yet the perception that after the Israeli attack that Iran’s oil infrastructure was going to be safe forever was shattered. Subtracting all the little war risk that was priced into oil now becomes a riskier proposition.

Now Israel says it is at ‘high level of readiness’ for Iranian attack. Is real has already signaled that if Iran ever attacked Israel again the targets that were previously not attacked would be fair game in other words there is a high likelihood that if Iran is foolish enough to carry out this attack that Israel will take out its nuclear facilities as well as its oil production and export capabilities.

The Times of Israel reported that Iran will deliver a “definitive and painful” response to Israel’s recent attack on its territory, likely before the US presidential election on November 5, CNN reported Wednesday, citing an anonymous senior source. The source, apparently an Iranian with knowledge of deliberations in Tehran, told the network: “The response of the Islamic Republic of Iran to the Zionist regime’s aggression will be definitive and painful.”

It may also be painful for short sellers if Israel does take the gloves off and attack Iranian oil facilities.

Green Energy Update! “Bloomberg reports that Ford Motor Co. plans to shut down the Michigan factory that produces its F-150 Lightning plug-in pickup truck, its signature electric vehicle, through the end of the year as demand for EVs continues to wane. “

Bloomberg Also reported that The Environmental Protection Agency has approved a proposed Texas oil port capable of exporting 1 million barrels of oil a day, even as the terminals face increasing scrutiny from environmental activists, progressive lawmakers and local officials. In a letter from the EPA made public by opponents of the project Thursday, the agency said it “does not object to the issuance of a license” for Sentinel Midstream LLC’s Texas Gulflink Deepwater Port. The company, which is backed by private equity firm Cresta Fund Management, still needs final approval via a record of decision from the Transportation Department’s Maritime Administration. The decision is expected by December 12.

Natural Gas could not get traction after a bullish weekly report because weather forecasts turn warmer for November .

The EIA talked about the rise of associated gas that may lead to a supply glut if this winter is warm.

The EIA pointed out that natural gas produced from the three largest tight oil-producing plays in the United States has increased in the last decade.

Natural gas comprised 40% of total production from the Bakken, the Eagle Ford, and the Permian compared with 29% in 2014.

Combined crude oil and natural gas production from these plays more than doubled over this period as hydraulic fracturing—also known as fracking—and horizontal drilling have allowed producers to access and extract more crude oil and natural gas from tight formations.

However, production of associated natural gas, which is natural gas produced from predominantly oil wells, has increased more rapidly from these tight oil plays.
Natural gas production from these plays more than tripled—an increase of 22 billion cubic feet per day (Bcf/d)—over the period compared with crude oil output, which more than doubled—an increase of 4 million barrels per day (b/d).

In Europe of course they’re well supplied but keep in mind that it’s not just about storage if Europe gets a cold winter’s their supplies could be squeezed especially as Russia is playing hardball with Ukraine.

Russia’s President Vladimir Putin says he’s ready to an extended deal to allow Russian gas to flow through pipelines in the Ukraine assuming that Ukraine signed the contract that expires in December.

Russia is suggesting that Ukraine is refusing to sign the contract. This showdown is going to be something that we have to watch on the international market.

Oil and gas markets are going to be watching today’s unemployment report as well as the development surrounding the US presidential election, we could see some extreme volatility if the election is close, be prepared for big swings on both sides of this market but ultimately, we have a strong upward bias for the price of oil going into the end of the year.

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Crude Oil Gains Momentum, Eyes Key Resistance Levels Above 71.83
By: Bruce Powers | October 31, 2024

• Crude oil gains for a second day, heading towards critical resistance levels that could redefine short-term trend.

Crude oil is on track to complete a second strong daily bullish move on Thursday that indicates improving demand. It follows yesterday’s daily bullish reversal that ended with a wide range green candle that closed near the highs. Today’s advance filled a gap from last week and kept on rising.

At the time of this writing, crude oil continues to show strength as it is trading near the highs of the day and may close nearby. That would keep crude in a bullish position to test higher price levels. Although a minor signal, on the way up today crude also recaptured the downtrend line that starts from the July highs.



Resistance Zone From 71.83 to 73.21

Next up, there is a potentially significant resistance zone a little higher, starting from 71.83 and rising to 73.21. The higher level is the 50% retracement, which should be watched in concert with the most recent interim swing high at 73.15. The price range starts with the 38.2% Fibonacci retracement level. Also, included with the range is potential resistance around the 50-Day MA at 71.96, and the 20-Day MA at 72.27.

Nonetheless, the 73.15 swing high is the key pivot as a breakout above starts to reverse the price structure of the short-term downtrend. A bull breakout above 73.15 would provide a renewed sign of strength once there is a daily close above it. Further, the moving average trend indicators would have been exceeded by then.

Consolidation Pattern May Be Evolving

The large symmetrical triangle pattern in crude oil has been discussed before. A bearish breakdown triggered at the beginning of September, and it was followed by a bullish reversal that rose back into the pattern. Subsequently, another breakdown from the pattern triggered. Given that crude continues to chop around it is possible that the consolidation pattern has evolved into a larger triangle.

That may account for the lack of follow-through. Nevertheless, it is not clear yet. The initial lower boundary line of the triangle, that is now around the 61.8% Fibonacci retracement level at 74.60, may continue to provide insights if it is approached again. The question is, will it lead to a bearish reversal or a bullish breakout?

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Natural Gas Correction Targets Key Fibonacci Levels Amid Further Weakness
By: Bruce Powers | October 31, 2024

• Natural gas correction targets Fibonacci retracements, signaling potential for further downside if supports break.

Natural gas moved into corrective mode on Thursday as it fell below Wednesday’s low of 2.77 and dropped to 2.69 before finding support. The decline follows a successful test of resistance at the top trendline of a large symmetrical triangle pattern. A deeper retracement is likely given the decisive decline seen today. Although natural gas bounced off the day’s low of 2.69 it remains under pressure. The intraday bounce has struggled to advance more than about a third of today’s trading range and it looks likely to close weak, in the lower half if not third of the day’s trading range.



Next Lower Target is 2.65, Followed by 2.58

The next lower target is the 38.2% Fibonacci retracement at 2.65. A decline below today’s low will signal a likely move to that price level. Nonetheless, a lower and what looks like a potentially more significant target zone is from 2.58 to 2.55. That range consists of a previous interim swing high and the 20-Day MA, respectively. Also, within that range is the 50% retracement level at 2.57. If that price zone is broken to the downside, then watch for support around the 61.8% Fibonacci retracement at 2.48, along with the 50-Day MA at 2.45.

Successful Test of 200-Day MA is Bullish

Recently, natural gas successfully tested the 200-Day MA as support. The 200-Day line was recaptured on September 11. Other than a quick test of support a week after the initial breakout, there has been no subsequent test of the 200-Day line as support. It can be considered as a maximum support level before the potential of natural gas in the foreseeable future starts to change. Staying above the 200-Day line during weakness would indicate strength overall given its long-term nature.

Higher Swing Lows Point to Underlying Strength

Moreover, notice how bullish momentum has been improving overall in recent months as represented by the higher swing lows and accompanying trendlines. If the higher internal trendline that connects the recent swing low fails as support, the potential for an eventual bullish breakout of the triangle diminishes or it may take longer to occur. The top triangle trendline is significant as it connects five swing highs. This means it may continue to offer strong resistance, or a bull breakout triggers with momentum spiking – a possibility.

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Spooky Bullish and Bearish Scary. The Energy Report
By: Phil Flynn | October 30, 2024

It’s Halloween. Everyone is entitled to one good scare. The Energy Information Administration (EIA) came out with a spooky bullish weekly supply and demand report that could lead to spine chilling supply squeeze and what is unnerving is that the market seems almost insensible to the potential for this as US Petroleum demand 21.638 million barrels a day the most in a year. That was led by a surge in gasoline demand that drove those inventories down to a two-year low. Yet because the market is afraid of its own shadow and the upcoming election, it only responded modestly. Then what happens when you hear the door slam and realize there’s nowhere left to run?

Even unnamed sources from OPEC suggested that their production cuts might be delayed for one or two months or perhaps indefinitely, was not enough to exercise the demons of doubt that are trying to steal the soul of this market. Oh sure, the market did rally on the rash of bullish news but was reluctant to fill the gap left on Sunday night. Perhaps it was because they fear the gruesome U.S. national debt that hit a horrifying $35.81 trillion dollars and the possibility of a disputed presidential election that might turn the US economy into a zombie.

Let us face it, there is something haunting in the light of the moon especially if you put the EIA data under it. A hair raising surge in gasoline demand to 9.42 million barrels a day against a backdrop of oil inventories that fell at a time of year when they should be rising. The EIA reported that commercial crude oil inventories fell by 500,000 barrels and are 4% below the five-year average for this time of year. Distillate fuel inventories decreased by 1.0 million barrels last week and are about a frightful 9% below the five-year average as we head into winter.

We saw a spooky sign from OPEC as imports of crude oil from Saudi Arabia fell to their lowest point last week since January 2021, at just 13,000 bpd, down from 150,000 bpd on the week. Crude imports from Canada, Iraq, Colombia, Brazil all slipped on the week according to Reuters.

Giovanni Staunovo reminds us that the EIA will provide US oil supply/demand data for the month of August. US July crude production was at 13.205mbpd, EIA’s August forecast is 13.359mbpd. US crude oil demand was at 20.768mbpd in August 23, EIA’s forecast for August 24 is 20.421mbpd.

With global inventories running close to decades low it might become scary if China stimulus kicks up Chinese oil demand. John Kemp at Kemp Energy pointed out that China’s manufacturers have reported a significant improvement in the trajectory of business activity. The official purchasing managers index climbed to 50.1 (35th percentile for all months since 2011) in October up from 49.8 (26th percentile) in September and 49.1 (6th percentile) in August backdrop of regulatory hell. Without LNG exports, the industry will face contraction with the loss of jobs as our country loses international influence.

As the LNG door slammed – there’s nowhere left to run! You see coal expand and wonder if you’ll ever see the sun. You close your eyes and hope that this is just imagination, but all the while you see carbon. The index climbed above the 50-points will be locked threshold dividing expanding activity from a contraction for the first time since April.

US natural gas producers are having nightmares about a Kamala Harris presidency on fear that LNG Exports will be stuck in purgatory against a creepin’ up behind! You’re out of time! Until we get the natural gas report! The Wall Street Journal says that, “natural-gas inventories likely increased by more than usual last week as mild autumn temperatures limited demand heading into the end of the injection season, according to a survey by The Wall Street Journal. Gas in underground storage is expected to have risen by 82 billion cubic feet to 3,867 Bcf in the week ended Oct. 25, according to the average estimate of 11 analysts, brokers and traders. Forecasts range from an injection of 75 Bcf to 94 Bcf.

The inventory build would be larger than the five-year average for the week of 67 Bcf and put inventories 182 Bcf or 4.9% above the five-year average, increasing the surplus for a second straight week.

It’s close to midnight and something’s buying oil in the dark. Under the moonlight, you see a pop that almost Stops Your Stop. You Try to Scream, but the computer takes the trade before you change It. You Start to scream, as oil rallies hard right before your eyes, You’re Paralyzed!

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