Conflicted. Wednesday, October 28, 2009 by Phil Flynn of PFGBEST

 

Conflicted.

A slight rebound in the dollar and a rebounding stock market has the oil market lacking conviction. While in the big picture the bulls still have the upper hand, the conviction to drive oil to the upper end of the trading range is lacking. Yesterday oil seemed to show strength in spite of a firm dollar and a rather weak stock market. It gained more strength as the stocks turned higher after word of an IBM stock buyback. Yet oil failed to reach the heights that we set last week.

Geo-political concerns may have added some support as well as Iran seems to be trying to buy time by asking for “important” changes to a proposal from the United Nations International Atomic Energy Agency to ship most of its stock of low-enriched uranium to Russia for further processing. This morning the IAEA says that Iran will deliver its response tomorrow. That is assuming of course they do not ask for another 48 hours. With the larger macroeconomic forces controlling oil and ample global supply, these geo-political issues have less sway on the market place. The market did react slightly to a report of a missile launching from Lebanon into Israel. Apparently no one was hurt and the market seems not to be worried.

On the supply front, the API really did not give bulls anything to worry about as we saw draws in every major category. The API reported that crude oil supply fell 3.53 million barrels in the latest week. We saw a slight increase in crude runs yet supply of distillates fell 671,000 barrels and gasoline by 255.000 barrels. The gasoline supply drop was not as spectacular as the dramatic drops we have seen in recent weeks. Even with supply underlying the market, the current interest for energy swirls around the economy and the dollar. Not only do we have to watch inventory but the influx of economic data.

Today we have a full plate with the Mortgage Bankers Association report on purchase applications as well as durable goods and new home sales. Numbers that may have as much or more sway then the inventory report on today’s market movements.

Check me out every day on the Fox Business Network!  Have you checked out all PFGBest and all it has to offer? Whatever you're trading needs we can handle it: cash, grains metals, gold coins, bars and even stocks. If your broker is not doing enough for you call me at 800-935-6487 or email me at pflynn@pfgbest.com. Our platforms are great and the service beyond compare!

Buy December crude at 7427 - stop 7300. 
Buy December RBOB at 18000 - stop 17800.
Buy December heating oil at 19500 - stop 19300.
Buy December natural gas at 510 - stop 470.

Recent articles from this author

• Blame Game! - Friday, November 20, 2009
• The End of Panic - Thursday, November 19, 2009
• Sitting Ida By - Wednesday, November 18, 2009
• It's Cheap! It''s Easy! - Tuesday, November 17, 2009
• Carried Away with the Carry Trade - Monday, November 16, 2009

About the author

Phil Flynn is Energy Analyst and General Market Analyst with PFGBEST (www.pfgbest.com). Phil is one of the world’s leading energy market analysts, providing individual investors, professional traders and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline and energy markets. Phil’s market commentary, fundamental and technical analysis, and long-term forecasts are sought by industry executives, traders and global media.

Because he has been available to media around the clock, even during some of the most turbulent market periods in history, and because he has built a solid reputation for accuracy in his market analysis and forecasts, through thousands of interviews and broadcast appearances for more than a decade, Phil Flynn has become a headline-making name even as he continues to provide expert advice and customer care to his proprietary trading account clients.

Media highlights include: CNN, CNBC, Bloomberg, ABC, CBS with Katie Couric, NBC’s “Today Show” and “Nightly News with Tom Brokaw”, FOX’s “O’Reilly Factor”, PBS’s “The Newshour with Jim Lehrer” and “Nightly Business Report”, MSNBC’s “The News with Brian Williams”, Wall Street Journal Report, The Wall Street Journal, Business Week, Investor’s Business Daily, The New York Times, The Los Angeles Times, Chicago Tribune, Associated Press, The Toronto Globe & Mail, Houston Chronicle, Futures Magazine, National Public Radio’s Marketplace, a chat with the President of the United States, and many more venues.

You can read Phil’s daily market analysis and blogs at www.pfgbest.com.

PFGBEST is among the largest non-clearing U.S. Futures Commission Merchants, with customers, affiliates and brokerage offices in more than 80 countries. The company is a leader in sustainable investing through diversified products including managed funds, futures, forex, options, full-service and discount brokerage, trader education, market research, and direct online futures trading through its BESTDirect™ platform, and numerous other platforms and applications.

Phil’s commitment to and experience in futures trading is documented in two books, The Mind of a Trader (Financial Times/Pitman,1997), and Trading Online (publisher, date), both by Alpesh B. Patel. Phil is a lifelong resident of Illinois. He attended Daley College in Chicago before beginning his career on the trading floor of the Chicago Mercantile Exchange.

Phil Flynn
Phone: 800.935.6487
Email:pflynn@pfgbest.com