Alaron Energy Comment

CHICAGO - Feb 11/08 - SNS -- Following is the energy futures comment from Alaron Trading Corp.

There is a whole lot of economic terrorism going on. Venezuela loses it after a UK court decided to freeze its state owned oil company assets in a move Venezuela said was economic terrorism. What is economic terrorism? Well I guess when it really comes down to it, economic terrorism is in the eye of the beholder.

Has Venezuela been an expert at using economic terrorism? Didn't they use illegal strong arm tactics against foreign oil companies and nationalized oil fields and tried to coerce  international oil  companies to sign away their legal rights or risk losing their right to profit from their own investment? Yes, they did.  I guess you could say that that was economic terrorism.

Or perhaps economic terror can be better defined by actions. Like when oil producers threaten to support oil prices by conspiring to hold back production just  like OPEC did Friday.   If OPEC keeps prices too high in a slowing economy that could mean recession and that in and of itself is a little terrorizing. Don't you think?

Or maybe economic terror is when a country like Russia cuts off natural gas supply to the Ukraine. That raises suspicion that a major producer of oil and natural gas may use its resource advantage as a political weapon against its neighbors.  You see when you comes down to it there is economic terror all around us  and most of it comes from the oil producing nations.

The latest economic terror threat comes from none other than Venezuelan's own  Hugo Chavez himself. Yesterday he threatened to stop sending oil to the US unless it halted its economic war against Venezuela.

Trilby Lundberg, the goddess of gas, reported that US gasoline prices fell more than 3 cents over the last two weeks. That puts the national average gas price at about $2.94 cents a gallon. It's all due to  demand for gasoline that  keeps on falling.

The Wall Street Journal reports that, “US gasoline refiners cut production to its lowest levels since 2003, as high prices and fears of recession clip demand." Ana Campoy writes, “battered by high oil prices and weakening demand, some US refiners are cutting back on production to fend off collapsing profits. Recession fears and high gasoline prices are  combining to put a dent into the nation's gasoline consumption. Year-ago comparisons show demand falling in the past three weeks, according to EIA. That has made it hard for refiners to raise prices at the pump when the price of oil, gasoline's raw material, climbs higher. Although demand is expected to firm up ahead of the summer driving season, analysts aren't expecting a major rebound, due to the lackluster economy.â€�

The oil rebound due to the plethora of news and cold weather should be short lived. Use the strength to buy bearish option strategies. Call Phil Flynn at 800-935-6487 to open your account.

Make sure you get signed up on the Phil Flynn Energy Blast and also get a free trial to Alaronenergies. Just call me at 800-935-6487 or email me at pflynn@alaron.com.

Stopped on short  March crude from apprx 8700  at apprx 9200. Sell March crude at 9350 -  stop 9450.

Stopped on short March RBOB from apprx 22900 at apprx 23500.  Sell March RBOB at 23900 - stop 24000.

Stopped on short March heating oil from apprx 245  at apprx 255. Sell March heating oil at 26000 -  stop 26300.

We're short March natural gas from apprx 850 - stop 857.

Have a GREAT day!

Phil Flynn

Alaron Research Team

800.563.9510

pflynn@alaron.com

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