Crude Crush Monday, February 01, 2010 by Phil Flynn of PFGBEST

Oil prices have been under pressure from weak demand, a strong dollar and ample supplies but today geo-politics will keep the market from getting totally crushed. Militants in Nigeria are back at it and have ended a cease fire and rising tensions in the Persian Gulf could keep oil from totally falling out of bed. Still with a glut of oil and plenty of spare production capacity, this market is hanging by a thin thread.

Dow Jones reports that overnight Nymex crude went up slightly after Nigeria's MEND says militants sabotaged Shell pipeline but notes it wasn't directly responsible. Shell earlier said sabotage of a pipeline had shut down three flow stations in Niger Delta, after militants Saturday threatened "all-out onslaught" on local oil industry. 

And if Nigeria is not enough, what about new tensions with Iran? The Guardian out of the UK is reporting that, “Tension between the US and Iran heightened dramatically today with the disclosure that Barak Obama is deploying a missile shield to protect American allies in the Gulf from attack by Tehran. The US is dispatching Patriot defensive missiles to four countries: Qatar, United Arab Emirates, Bahrain and Kuwait and keeping two ships in the Gulf capable of shooting down Iranian missiles. Washington is also helping Saudi Arabia develop a force to protect its oil installations. American officials said the move is aimed at deterring an attack by Iran and reassuring Gulf States fearful that Tehran might react to sanctions by striking at US allies in the region. Washington is also seeking to discourage Israel from striking Iran by demonstrating that the US is prepared to contain any threat. There was also a report that Iranian President Ahamadineajad is making a threat saying, "Iran will deliver a telling blow to global powers on Feb. 11.” An early Valentine present perhaps?

Oil failed to take out the key $72.00 support area so we could see a bit of a rebound. Long term players we are keeping our longer term bearish outlook. We have been saying four sometime that oil is headed down to the $40 handle and long term players should target that area. Last month oil had the biggest peak to valley drop since December of 2008 which obviously fits in with our bearish outlook. Make sure you are getting the latest news by calling me at 800-935-6487 or email me at pflynn@pfgbest.com to open your account. Also remember to check me out each day on the Fox Business Network.   

 

 

 

Recent articles from this author

• Greece the Skids - Friday, March 19, 2010
• How natural gas production saved the global economy! - Thursday, March 18, 2010
• When OPEC Eyes Are Smiling?! - Wednesday, March 17, 2010
• You've Got A Friend - Tuesday, March 16, 2010
• The Great Fire Wall of China - Monday, March 15, 2010

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