Alaron Energy Commodity Comment

CHICAGO - Feb 1/07 - SNS -- Following is the oil and ethnaol futures comment from Alaron Trading Corp.

You could almost hear the Department of Energy break out in song as they warned motorists that more than likely gasoline pump prices have bottomed out. The Energy Information Agency, the statistical arm of the Department of Energy, prepared consumers for rising prices. The EIA said that with the near-month crude oil price rising close to 4.50 per barrel to nearly $57 per barrel, retail gasoline prices have seemingly bottomed. The agency also said that US gasoline inventories should fluctuate from one end of the average to the other as motor fuel demand picks up in February and March. Where is Dandy Don when you need him?

The party may be over for oil market bears that were betting on global warming but instead are now facing an ice age. In another sign that the oil market psychology is decidedly bullish, the market quickly dismissed what on the surface was bearish weekly data from the DOE. For example the DOE reported that crude inventories rose a much more than expected 2.7 million barrels. And the supplies of gasoline rose a more than expected 3.8 million barrels with those much watched distillates up by a slightly more than expected 2.6 million barrels.

After an initial sell off the market then went on a bullish ride.

Natural gas soared and broke late. Crude soared and broke and rallied again. Each time the crude broke, it seemed big buy orders came in which was most likely some big funds covering their shorts. Wild swings and wild volatility and perhaps we will see more on the release of the natural gas report today.

We are long March crude from apprx 5151 on the rollover- raise stop to 5500!!!

We are long March RBOB from apprx 14941 on the rollover and we were stopped at apprx 15200!!!! Buy March RBOB at 15200 - stop 15050.

We are long March heating oil on the rollover from apprx 15600 - leave stop at 16000!!!

Buy March natural gas at 710 - stop 680.

Phil Flynn

Alaron Research Team

800.935.6487

pflynn@alaron.com

www.alaron.com

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