Oil is still fighting hard to find something to believe in. The bulls and bears continue to fight to a stalemate result as they try to make their case. For every bearish story there seems to be a compelling bullish argument on the other side. On one hand you have oil demand near a ten year low and supply near a 20 year high and on the other side you have the Fed and its magic money printing press. But then you have OPEC cutting back on production and you have oil investment falling to the wayside.
Oil rallied Friday but is selling off today. Some thought that the rally in oil had something to do with the growing talk of a potential attack on Iran by Israel. This talk seemed to gain a bit of credibility when the London Times reported that the Israeli military is preparing itself to launch a massive aerial assault on Iran's nuclear facilities within days of being given the go-ahead by its new government. Today the market seems to be worrying more about the rebounding dollar and the falling stock market than any attack talk. The market always seems to get back to basics on Monday.
Reuters News reported that the number of rigs drilling for natural gas in the United States fell 30 to 760 last week, the lowest level in more than six years, according to a report issued on Friday by oil services firm Baker Hughes Inc in Houston. Joe Silha says that U.S. natural gas drilling rigs have been in a steady decline since peaking above 1,600 in September and now stand about 701 below the same week last year, the lowest level since March 14, 2003, when there were 754 gas rigs operating.
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Buy June crude oil at 4480 - stop 4330.
Buy June heating oil at 12500 - stop 11900.
Buy June RBOB at 12900 - stop 12700.
Sell June natural gas at 390 - stop 420.