Oil bulls get rejected on gluts ruts but avoids a total meltdown because of some nuts. The glut is in oil, the rut is in the economy and the nuts to put it delicately are involved in some of the geo-political events that are still giving some to support oil. Who are those nuts you might ask? Well ill just report and you decide. I mean is it the nutty dispute between Russia and the Ukraine as Russia is trying to force the Ukraine to pay them market price for gas based on where it traded back in May of last year? Or is it the sad conflict that still rages between Hamas and Israel in the Gaza strip?

Oil which got hammered on a wildly bearish weekly supply report spiked back to life on more geo-political news overnight. The only thing that can drive oil higher in the short term is geo-political news because we are loaded with crude! Hoe loaded! Well so loaded that we are drunk with crude. The 6.7 million barrel in crude shows supplies of crude are reaching glut like proportions. Yet despite that fact overnight oil got shaken out of its bearish stupor on reports that there were rockets fired into Israel from Lebanon. Dow Jones news reported that the rockets landed early Thursday near the northern Israeli town of Nahariya citing local media reports. Obviously to oil traders this is raising fears of a widening conflict and raising fears that that Lebanon's Hezbollah militia which fought a 34-day war with the Israel in 2006 may be joining forces with H amas. Yet AFP reports that Hezbollah has made it understood to the Lebanese government representative, that it is not behind Thursday's rocket attack on northern Israel. Minister Tarek Mitri told AFP that Hezbollah has assured us that they remain committed to stability and Resolution 1701, and that is a euphemism for saying they are not involved, he comment was referring to the U.N. Security Council resolution that brought an end to the 2006 war between Israel and Hezbollah. We have absolutely no reason to think that Hezbollah might be involved.Well he may have no reason to think that but oil traders with money on the line obviously are going to fear that.

Russia is still using its energy to bully the world into trying to get things their way. The Russians that have openly called for a gas cartel to conspire to manipulate natural gas prices are trying to force the Ukraine into rewriting their agreements. Russia which has coveted the Ukraine's gas pipelines and have done everything they can to undermine the Ukrainian pro western government even to the extent as some allege the attempted murder of the Ukrainian President. The Russians now want the Ukraine to pay some fantasy price for gas because they want to try to break the Ukrainian government and refuse to pay a fair transit rate for the use of Ukranian pipelines. At the same time they want to remind Europe that they can still bully the world and use their stranglehold over energy supplies to get them and anyone else to do their bidding. That hap pens w hen they are not too busy locking up political opponents and using its tax laws to steal from private enterprise and nationalize companies throwing the executives in jail possibly killing journalists to remind them that the free press is not really free and erasing Russian democratic dreams and ambitions.

What a day! I want to thank all of you for all the calls and emails as they have come pouring in! Energy Report readers rock! These are some incredible challenging times and I am glad I have been a service to you in some small way. For all my readers feel free to send any comments or questions to me at pflynn@alaron.com or to call me at 800-935-6487. And don't forget you can also see me each day on the Fox Business Network or FBN for short. Also call for your free trial to Alaronenergies and my daily email blast!! It is so easy! Just call me at 800-935-6487 or email me at pflynn@alaron.com

Still short crude after all these months!!!! Short February crude on triple rollover apprx 4461 stop 5100!!!!!! Buy February Heating oil at 14700 stop14400

Sold February RBOB at 12000 lower stop 11500

Bought February Natural gas apprx 550 raise stop 560!!