Oil Inauguration. Oil gets hammered on the eve and the start of the day of the Inauguration of the United States 44th President Barack Obama. Is the price of oil benefiting by an Obama effect?

The honeymoon starts early as the President Elect seems to be getting a break by having two major issues that were supporting energy on the verge of being solved. Latest reports say that Russian gas should be flowing through the Ukraine and there is a possibility that there may be a cease fire in the Gaza strip.

Oil fund manager Ellis Eckland points out that option volatility has come down dramatically. That can mean two things. One is that we are entering an era of much smaller trading ranges or that the predictions that President Bush was going to start World War Three before he left office was over stated by the fearful of the far left. Option volatility seemed to suggest that the market was predicting that something big was going to come down before president Bush left office. Most of the speculation surrounded Iran and its nuclear program. I cannot tell you how many times I got emails and calls from people convinced that either President Bush or Israel was going to attack Iran before he left office. Of course I told them I really doubted that would happen but to be fair, things did happen that might have been timed to happen before President Bush left office.

The Israel operation in Gaza happened and Russia cut off gas to the Ukraine just as the clock was starting to run out on President Bush and now both of these situations are on the road to being solved. Did Israel time the Gaza operation because it was unsure of the type of support it would receive from an Obama administration? Did Russia cut off gas supplies to the Ukraine because of the uncertainty of how an Obama administration would react? I think that the Israel operation was timed ahead of Bush's departure but I believe that the Russia Ukraine situation probably had nothing to do with Obama but it does seem like these situations are going to be two less headaches that Obama is going to have to deal with.

Alan Cullison of the Wall Street Journal writes that ....diplomatic pressure and their own crumbling economies, Russia and Ukraine signed an agreement Monday that they said will restore gas shipments to Europe and make cut-offs to their customers a problem of the past. He goes on to say that, Western capitals remained wary, despite the fanfare of the signing ceremony in Moscow. The European Union, vexed by the failure of previous gas transit deals in the past two weeks, testily called Monday for a timetable for deliveries and said it won't consider the crisis over until its monitors register gas arriving at the bloc's borders. The Journal also says that, A gas agreement has been complicated by tense relations between Russia and Ukraine since the Orange Revolution of 2004 and by infighting within the Ukrainian government. Russia has accused Ukraine of siphoning off some of its gas exports through Ukraine, and Ms. Tymoshenko has been fighting with Ukrainian President Viktor Yushchenko in the run-up to presidential elections. Under terms of the agreement, both Russia and Ukraine can claim to have won some concessions from each other. Ukraine will buy Russian gas at a 20% discount to European market prices in 2009, while Kiev agreed to retain preferential transit fees for Russia this year. Both sides said they will pay market prices beginning in 2010. Neither side released actual prices, however. The agreement came as both countries' economies show fresh signs of buckling under the strain of the financial crisis. Ukraine's currency, the hryvnia, has shed half of its value against the dollar in the past three months, and analysts are warning of an Iceland-style meltdown.AFP is reporting that Russian gas flowing through Ukraine will reach European consumers within 36 hours at the most according to Ukrainian state energy firm Naftogaz.

The Boston Globe is reporting that a fragile cease fire is holding in the Gaza strip as Hamas regains control. Uniformed police officers returned to the streets of Gaza yesterday, machine guns in tow, as Hamas declared that Israel's 22-day air and land assault had done nothing to weaken the militant group's authority here. As the cease-fire held, Israeli tanks and soldiers continued their withdrawal from the coastal enclave yesterday. Israeli officials said they hoped to pull all troops out of the Gaza Strip by the time Barack Obama was inaugurated as president today, the Associated Press reported. That would avoid subjecting Obama to a Mideast problem on his first day in office. But Israeli government officials.

Of course those issues won't sole the more bearish influence and bigger problem for the president elect and that is deflation. Last Friday it was reported that U.S. consumer prices increased just 0.1% in 2008, the smallest increase in 54 years. The consumer price index fell 0.7% in December which was the third decline in a row and was led by an 8.3% drop in energy prices and a 0.1% drop in food prices. Now you can say that the decline was all about energy but what does the decline in energy represent? It represents the weakening of demand. It represents the loss of jobs, the loss of factories, and the economic paint that stretches around the globe. It also represents the lack of confidence in the global banking system and the fact that economic activity is anemic. The President elect is going to have his hands full and we wish him the best and our prayers.

What will an Obama presidency mean for your portfolio! Find Out by watching the Fox Business Network where you can see me every day! Last trading day for February crude! A flood of oil coming to market! Look out below! If you are looking for the next great play in energy call me at 800-935-6487 or email me at pflynn@alaron.com to open your account. Still short after all these months!

We're short March crude from apprx 4354 on what is now a quadruple rollover! Lower stop to 5400.

Sell March heating oil at 15500 - stop 15700.

Sell March RBOB at 12500 - stop 12700.

Sell March natural gas 550 - stop 590.

The March Corn settled at 398 1/4 up 7 1/4 cents.

The range was 407 to 389.

I still remain bullish Corn.

The Energies continue to tumble.

I still remain bearish in this sector.

It's Inauguration Day !~

Let's salute our new Commander in Chief and Salute our

former Commander in Chief !

Have agreat trading day !