Alaron Energy Comment

CHICAGO - Jan 23/08 - SNS -- Following is the energy futures comment from Alaron Trading Corp.

How do you spell relief?   R-A-T-E   C-U-T. The world's stock markets were in turmoil and the Federal Reserve decided to act to try to end the pain. The Fed stepped up to the plate with and emergency rate cut of 75 basis point in both the Fed funds rate and the discount rate to save the markets from what was shaping up to be a market disaster. The emergency rate was dramatic but not really a surprise if you know Ben Bernanke. Yet  the jury is still out on whether or not it will have the desired effect.

The cut was either the largest in decades or very near so  and it's clear that almost everybody is trying to do their part. But who will save the oil markets? So let's see. The Federal Reserve stepped in to save the world's stock markets  from drifting into total a never ending abyss. Even President Bush tolerated Senator Majority Leader Harry Reid and House Speaker Nancy Pelosi joining together to do their part by giving out free money with talk of a  near $150 billion dollar tax cut and increased government spending. The rate cut and the stimulus plan is the equivalent of hitting the markets with a triple shot café Americano with a chaser of 5 shots of straight espresso. Yet will that  be enough and is everyone doing their best?

The tax rebate is a great idea despite the pessimism  from skeptics. But when it comes to the government giving you money remember this golden rule. Anytime the government gives you back some of your own money, it is a good thing. It has been proven time and time again that you will put it to much more effective use than the government can. Will it save the economy from the duster and solve the credit crisis? Maybe not but it sure won't hurt. And that is saying a lot about a plan from the government.

So the Fed is doing its part and the President, House Speaker and Senate Majority Leader are doing their part now the question for oil traders is whether or not OPEC will do their part. Will OPEC step up to the plate and try to help save the world economy from a major big time market meltdown? OPEC  likes to fancy itself as some type of legitimate financial institution has done absolutely nothing to try to help ease the world's economic concerns. While the Fed slashes interest rates and the Federal government gets ready to throw billions of dollars at the world economy OPEC is still colluding to hold back oil supply. It is unbelievable and unconscionable that OPEC is still playing games about adding more oil to the world market.

OPEC is  blinded by greed and the mismanagement of their recent oil wealth is causing them to  make a mistake that will harm their long-term economic interest. OPEC could get away with squeezing consumers when the worldwide economy was strong, but squeezing them at a time when the economic outlook is deteriorating could lead to economic disaster. Not only for the cartel but for the rest of the world economies as well. I know OPEC still fears raising production in a slowing economy and creating an oil glut. Yet at the same time if they don't attempt to bring oil prices down they may push the economy over the edge. If the world economies sink into recession it will ultimately kill demand. OPEC is foolish if it does not take immediate action to try to talk and pump - even if it's very little that they can actually pump - oil prices down or else it will be OPEC that ultimately will pay the price. It's not like the world is swimming in extra supply anyway. Supplies in the world are still below average. More oil from OPE C will just replenish supply and may help the economy from getting a lot worse and keep demand for oil strong. Too little oil may really damage the economy and it will be OPEC that will be left holding the barrel.

Don't you be left holding the barrel! Have you overstayed the bullish oil party! Time to make a change! Open your account with Phil Flynn today! Get on my daily email blast and sign up for your free trial of Alaronenergies.com. Just call me at 800-935-6487 or email me at pflynn@alaron.com. See me tomorrow on the Fox Business Channel!

Stopped on short  March crude from apprx 8992 at  apprx 8800!! Sell March crude at 8950 -  stop 9050!

Stopped on short February RBOB from apprx 24500 at  apprx 22650! Sell March RBOB 233 -  stop 237.

Stopped on short  February heating oil from apprx 255 at apprx  247!! Sell March Heating oil at 248 -  stop 255.

We're short  February natural gas  from apprx 785 - stop 805.

Have a GREAT day!

Phil Flynn

Alaron Research Team

800.563.9510

pflynn@alaron.com

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