Alaron Energy Comment

CHICAGO - Apr 7/08 - SNS -- Following is the energy futures comment from Alaron Trading Corp.

When bad is not quite bad enough. The monthly jobs report was bad but not bad enough to give us a clear direction on oil prices.

The monthly unemployment  report on Friday  showed that jobs fell by 80,000 in the latest month right at the lower end of expectations. But the key was in the range of expectations. Had the number fallen outside of that range to say a loss of 90,000 jobs or say 100,000 jobs, oil would have broken out to the upside and targeted $120.Yet as it was, it was not bad enough to do that. Yes, the market has a bullish bias but unless there is some earth shattering news, look for oil to stay in its same huge trading range.

Still, that range should present the possibility for some sweet opportunities as it's a very wide range. The low end is 9950 and 10820 on the upside. The funds are creeping back in which is lending support.  If the dollar rebounds, oil should look to test the lower end of that range.

We have another week and another record price at the pump. Trilby Lundberg, the princess of petrol, reports in her much anticipated price survey that the average price for a gallon on gasoline rose 5.26 cents to a record high in the last two weeks. According to Ms. Lundberg the national average for self-serve, regular unleaded gas was $3.3171 a gallon on Friday April 4. Trilby told Reuters news that the essential causes are strong crude prices and dramatically higher ethanol prices as refiners pass on the costs of mandated spring reformulations of gasoline.

We have all heard the term petrol-dollar, now how about a petrol currency? The AP is reporting that Iranian President Mahmoud Ahamadinejad is urging OPEC members to form a joint bank and stop pricing oil trades in US dollars. Apparently Ahamadinejad is thinking about  having a joint currency. Of course I don't think the rest of OPEC wants a currency that includes the disastrous Iranian economy. Why would it?

Speaking of OPEC, reports say that OPEC production fell last month for the first since last August. Bloomberg reported that OPEC pumped an average of 32.35 million barrels of oil a day last month. That was down 85,000 barrels a day February and the first decline in seven months. They also say that high oil price is the fault of the dollar.So no oil for you!

Are you still worried about global warming? You need not worry, at least not this year. The BBC reported that global temperatures will drop “slightlyâ€� this year as a result of the cooling effect of La Nina current in the Pacific, quoting UN meteorologists. The World Meteorological Organization's secretary-general, Michel Jarrud, told the BBC it was likely that La Nina would continue into summer. So according to the BBC that this would mean global temperatures have not risen since 1998.  Of course global warming experts say, “we are still clearly in a long-term warming trend" and they forecast a new record high within the next five years.  Yet excuse me if I am wrong. I do not remember even one global warming expert predicting that global temperatures would not rise over the last decade. Could this be the lost decade when it comes to global warming?

And what about those fears that the global warming experts raised about natural disasters? Didn't some say that the active hurricane season we had in the Gulf of Mexico and the strange weather that was happening all over the country and the globe was due to unmistakable global warming? Yet how is this possible if global temperatures have not risen in the past ten years? Why were we not having these events 10 years ago?

This is also having and impact on business in a strange way. The Guardian Press reported that Lloyd's of London warned that an absence of natural disasters man-made and otherwise was putting pressure on firms to reduce premiums in 2008. The world's oldest and largest insurers of natural disasters were being squeezed.  The company said at least half of their business was conducted in the US last year. It was a major insurer of the Florida seaboard and oil rigs in the Gulf of Mexico. The Guardian says yet after two years of relatively few claims for environmental damage, it has increased competition in the sector.  That means for futures this hurricane season the “hurricane premiumâ€� will be lower as well. That also means if we do have an active hurricane season the move will be much stronger to the upside! I am not panicked about global warming but just to be safe you might want to by some cheap natural gas calls.

Tired of waiting for spring! Well spring forward and sign up for your free trial of Alaronenergies! Just call Phil Flynn at 800-935-6487 or email me at pflynn@alaron.com to open your account. Check out the Fox Business Network and sign up for a free trial of Alaronenergies. Just call Phil Flynn at 800-935-6487 or email me at pflynn@alaron.com  to open your trading account.  

We're short  May crude  from apprx 10770 -  stop 10850.

Sell May RBOB at 27850 - stop 28000.

Sell May heating oil at  31000 - stop 31500.

We're long May natural gas from  apprx 940 - stop 933.

Have a GREAT day!

Phil Flynn

Alaron Research Team

800.563.9510

pflynn@alaron.com

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