Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: gparker940 who wrote (40002)	3/9/2005 9:33:19 PM
From: quehubo	Respond to of 206330

DJ UPDATE:OIL FUTURES:Nymex Crude Ends Up; Apr Misses Record (Updates with settlement prices, technical analysis) NEW YORK (Dow Jones)--Crude oil futures posted modest gains at the New York Mercantile Exchange on Wednesday, after the front-month April contract surged to within two pennies of a record high of $55.67 but failed to top it. The April contract rose as high as $55.65 a barrel amid mounting supply concerns but failed to take out the old record high set last October, prompting speculators to take profits. "When you approach a previous major high, it's natural for people to shift from adding length to taking profits," said Walter Zimmerman, an energy analyst at brokerage United Energy in New York. At the Nymex, April crude futures settled 18 cents higher at $54.77 a barrel. The May contract closed at $55.35 a barrel after hitting a life-of- contract high of $56.30 a barrel. But as records go, it failed to impress analysts. With Wednesday's failed rally, crude futures may have formed what technical analysts call a "Doji Star" top, a peaking pattern that requires confirmation. The peak occurs when a market opens higher, rallies to new high and then fails and reverses to the opening, which is essentially what happened to crude futures Wednesday. Confirmation of the top by a further downside action would would signal the end of an extended rally - in this case, either the rally that began with the Feb. 9 low of $44.60 or the more extended uptrend that followed the Dec. 13 low of $40.25 a barrel. Zimmerman said Thursday's price action will be key to the market's short term direction. "If we don't get a down day tomorrow, today's action would appear to have been a little bull market rest stop and the trend is still up," he said. "If we do get a down day, then the question is: What ended today? Was it the rally from early February or the rally from early December?" On London's International Petroleum Exchange, North Sea Brent futures easily smashed the previous high. Front-month April Brent soared as high as $54.30 a barrel, well above Tuesday's record high of $53.30 a barrel, before settling at $53.38 a barrel, itself a new settlement high. Petroleum products futures, which helped lead the complex higher earlier in the week, performed less impressively. April gasoline futures rose as high as $1.56 a gallon before ending with a loss of 24 points at $1.5329 a gallon. April heating oil futures settled 87 points higher at $1.5325 a gallon, well off the intraday high of $1.5560 a gallon. The early rally came amid concern about a tightening global oil market. Speculators were betting that while inventories are rising, major oil producers will struggle to meet rising oil demand later in the year. "The market is advancing on fears that demand is going to outstrip supply," said Peter Beutel, an analyst at Cameron Hanover, a trading advisory firm based in New Canaan, Conn. "There is a feeling that producers do not have enough spare capacity to keep up with demand even over the next few months." The Organization of Petroleum Exporting Countries, the group responsible for more than one-third of the world's oil production, meets March 16 to approve output policy for the second quarter, typically a weak demand time of year. As recently as last month, some OPEC officials were in favor of an output cut. But with oil prices rising sharply, OPEC officials have reached a consensus to leave output quotas unchanged at 27 million barrels a day. OPEC members are already producing above that ceiling, and on Wednesday, a senior OPEC delegate told Dow Jones Newswires that OPEC will pump more oil to meet rising demand even without a formal agreement to raise the output quotas. OPEC officials say the cartel has about 2 million barrels a day in spare production capacity that can be quickly brought on line in the event of a surge in demand. Saudi Arabia holds most of that capacity. But analysts say the actual figure may be closer to 1 million barrels. Indeed, the federal Energy Information Administration said Tuesday that OPEC's spare capacity fell by 500,000 barrels a day to 1.1 million barrels a day as OPEC members raised production. The capacity constraint has raised fears of potential oil shortages later this year. As a result, traders have grown increasingly indifferent to rising inventories. Wednesday's price action was a case in point. Prices rallied even after EIA reported that crude stocks grew by a larger-than-expected 3.2 million barrels to 302.6 million barrels, a historically high level that suggests the market is adequately supplied.