We have more oil than we know what to do with yet the oil marketkeeps hanging in there! I am sure today politicians will demand an investigation to find out why Conoco Phillips profits fell 80%! Where is the outrage? When big oil made record profits the politicians are offended yet when they lose money we do not hear a peep.

Why is Conoco Phillips losing money? Well because the global economy was in a recession. The same way that when the global economy was on fire they were making record profits! Let's face it, what's good for big oil is good for America! The same way they used to say what is good for GM is good for America. That's why America bought GM.Better watch your back big oil, big brother is watching you.

But enough about falling profits for big oil, what about big profits on the contango? The contango play is still running strong and encoring the marketplace to put oil away for a rainy day. Not only are they storing oil on land but on sea as well. Yesterday Bloomberg News reported that Frontline Ltd., the world's largest supertanker operator, said traders are storing 100 million barrels of oil at sea, enough to supply Europe for five days. The amount is about 25 percent more than Frontline estimated in January and will help buoy tanker rates that have slumped 87 percent since peaking in July. Oil is mostly being stored on modern double-hulled carriers. In fact 10% of all of the 405 such carriers in service is used just for storage at this point.

Yet despite this sea of crude oil, the marketcontinues to stay strong. Oil is being bought by some funds as a safe haven play ahead of the release from the Fed a report onhow the bank stress tests are going to be carried out. This stress test is adding stress to the market place adding to safe harbor buying in precious metals and oil. Oh sure, gold got help by some stronger than expected demand in India ahead of a major gold buying holiday and on word that China increased their gold reserves. Yet the market did seem to be a bit on edge as well. Oil looked again to stocks but also to metals as an excuse to ignore heavy supply fundamentals and what some say are some bearish chart formation set ups.

The way the market is acting, I believe that break's should be bought. What strengthensthat belief somewhat is the report from Dow Jones quoting OPEC Secretary General Abdalla Salem El-Badri as saying that he doesn't expect the oil cartel to cut production when the group meets next month, despite signs of even weaker crude demand and swelling oil inventory in big energy consuming nations.The Organization of Petroleum Exporting Countries needs to fully implement an agreement announced back in December to remove 4.2 million barrels a day from world markets, El-Badri said.OPEC meets May 28 in Vienna.

Natural gas on the other hand is still looking ominous. Natural gas futures reached a new six-year low settlement price as the market prepared for some nice spring weather (it's abouttime!)a larger-than-expected build in U.S. gas inventories and the shutdown of GM plants as well as the growing potential for a Chrysler bankruptcy. The EIA reported a higher than expected injection into storage of 46 billion cubic feet. Natural gas settled at $3.409 a million British thermal units the lowest since Sep. 12, 2002. We can talk weather but it is the drop in industrial demand that is killing this market.The latest injection brings the total amount of gas in storage to 1.741 trillion cubic feet, 22.7% above the five-year average and 35.8% above last year's level.

The Energy Report goes on hiatus next week!!! Make sure you call my team for any help that you may need and for trade updates! Call them at 800-935-6487 And email me at pflynn@alaron.com and see me today and every dayon the Fox Business Network!

Buy June crude oil at 4580 - stop 4430.

Buy June heating oil at 12500 -stop 11900.

Buy June RBOB at 12900 - stop 12700.

We're short June natural gas from apprx 390 - lowerstop to 368!!! Objective is290!!! Yikes!!!