Oil prices rise before the holiday weekend

Oil prices rose today after almost dropping below $130 a barrel.  They managed to turn around after falling as far as $130.16 to rally by the close to settle up $1.38 at $132.19 a barrel on the New York Mercantile Exchange.

 

Gasoline prices at the pump soared 4.4 cents overnight to a nationwide average of $3.875 a gallon according to AAA and the Oil Price Information Service.  Five states are currently averaging over $4 a gallon, Connecticut, California, New York, Illinois and the most expensive is Alaska, where gas is averaging $4.181 a gallon.  Gasoline futures rose 6.63 cents to $3.396 a gallon.

 

Diesel prices rose 5.9 cents to a record of $4.649.  Diesel prices are averaging more than $5 a gallon in some parts of the U.S. and may rise above an average of $5 in California and New York state over the weekend.  Meanwhile heating oil futures fell 8.87 cents to settle at $3.8656 a gallon.

 

Natural gas futures rose 16 cents to settle at $11.857 per 1,000 cubic feet.

 

Federal Highway Administration data shows the number of miles American travelled fell 4.3 percent in March compared to last year.  This is the first time since 1979 that March year-over-year mileage has dropped.

 

Bankrupt Frontier Airlines announced new fees today, thanks to the rising oil prices.  If you want to carry home antlers you get during the hunting season the fee will now increase from $75 to $100.

 

It also plans to charge a $25 fee for a second checked bag, cancel half-price infant seats and take no more bookings for pets traveling in airplace cabins.  The fee for children traveling alone on Frontier flights will increase to $50 from $40.  It also plans to optimize it flght tracks using software based on air traffic and weather conditions, installing lighter leather seats, and the use of more fuel-efficient aircraft.

 

The number of rigs actively exploring for oil and natural gas in the United States increased by 27 this week to 1,889 according to the Baker Hughes Inc reported released today.  1,493 rigs were exploring for natural gas, 386 for oil and 10 were listed as miscellaneous.  One year ago the rig count stood at 1,760.

 

China has released 169,365 barrels of oil from its strategic petroleum reserve to help with the recovery from the earthquake which his the country a couple of weeks ago.

 

Marathon Oil Company spent $1.8 million in 1Q lobbying the federal government on environmental and other issues.

 

A monthly survey by Reuters found analysts expected crude oil prices to average $107.13 a barrel in 2008 up from $72.30 in 2007.  This was an increase of more than $10 from the last poll late in April.  They also expect prices to stay above $106 for 2009 and $102 in 2010, compared to $92 in the last poll, due to concerns over long term supply constraints and strong demand from emerging markets.

 

The National Oceanic and Atmospheric Administration said Thursday that is predicts a near-average hurricane season this year.  NOAA sees a 60-70% chance of 12 to 16 named storms, including six to nine hurricanes and two to five major hurricanes.  It was Hurricane Katrina that first sent gasoline prices above $3 a gallon.  Hurricanes often disrupt oil and natural gas production in the Gulf of Mexico.

 

Relative strength climbed once again finishing the week at 73%.  The 20-day moving average climbed to $123.10 and the 50-day moving average climbed to $113.93.  Volume, as expected dropped over 100,000 contracts to 301,898.  Open interest climbed slightly to 378,974 open July contracts.  Overall volume tanked dropping over 200,000 contracts to 578,661 contracts being traded today.  Overall open interest climbed over 5000 contracts to 5,623,168 open contracts now on the New York Mercantile Exchange.

 

As the summer travel season appoaches some traders will be away from their desk so seein volume drop between now and Labor Day Weekend wouldn't be a big surprise, especially right before a holiday weekend.  Something is trying to tell me the correction may be very close at hand right now.  I'm going to have to do a little more work with the numbers present and see what I am actually coming up with for the numbers.