Crude Cools Ahead Of Talks
Crude oil is off a hefty 2.5% early in the New York futures session, falling .75
to 32.20 after a minor OPEC oil minister (from Indonesia) said the cartel would
"stick to that agreement." The minister was referencing informal plans
made at the last meeting by the producing group to boost output by 500,000
barrels a day once the price of a basket of OPEC crude rose above $28 for
more than 20 days. Two qualifiers linger about any reaffirmation of the informal
agreement. First, only three of the 11 members have the capacity to increase
production as the remaining members are already operating at full capacity.
Second, OPEC already "cheats" or exceeds production by the 500,000
barrel limit. So theoretically the group could leave production at current
"unofficial" levels and the world would see no net increase in oil
supply.
From the Momentum-5
List, natural gas spiked to a new contract high, surpassing the previous
record set on May 31. Natural gas closed at its highest level in four years
Thursday. The low supply situation in the commodity is being aggravated by high
demand from gas-fired electrical-generation plants which are running on overtime
to power air conditioners turned up to provide relief from heat
waves on both coasts. Nat gas fell below 4.555, which could serves as a trigger for a Turtle
Soup (reversal) sell setup. This same-day-reversal strategy goes short below
4.555 and places a stop at the high of the day which currently stands at 4.490.
Dollar index futures, from the Implosion-5 List,
are plunging and trading at the bottom of a recent range or handle of an
inverted O’Neil cup-with-handle pattern. The euroFX is the major mover against
the buck, up more than 1%.
Pork bellies finished strong Thursday, making good late on
their
Turtle Soup Plus One Buy
setup. The July contract followed through by gapping higher in Friday’s
session. The trigger of this setup at 84.900 remains key as it represents a
multi-month low and a potential neckline of a head-and-shoulders pattern.
Orange juice has been showing higher lows inside its
protracted base which could be indicative of direction for a potentially
explosive move. Juice is poised to make a big move out of a Multiple Days Low
Volatility situation.