Alaron Energy Comment

CHICAGO - May 5/08 - SNS -- Following is the energy futures comment from Alaron Trading Corp.

Talk about die hard. Somebody should call Bruce Willis as the oil bull has gone into the Die Hard Zone. Forget the oil pegs to the dollar for the moment and focus on the fact that this stubborn oil bull just refuses to die.  

What a week I missed! It was the week that had all the elements to start the great commodity unwind. Yet oil seems to defy its peg to the dollar at every turn. We had a week of selling and a better than expected employment report and a stronger than expected GDP report put pressure on oil. It was assumed of course that a better than expected jobs report would be the final nail in the oil bull's coffin. Yet despite getting the better than expected jobs report, the oil market's reaction seemed to defy the common market perception. There was something wrong when oil failed to fall after the number. Oil showed surprising strength and soared despite a resurgent dollar and broad based commodity weakness. Some pointed to simple short covering. Others pointed to reports of another attack in Iraq by Turkey on Kurdish rebels. And what about the typical weekend   worries of ongoing violence in Nigeria. Yet really, in the end, it's probably just a matter that a strong oil bull will only       die hard in the bitter end.  

It was not the demand side that drove us, at least not in the US. The EIA said in last Wednesday's report that U.S. crude oil refinery inputs averaged 14.7 million barrels per day during the week ending April 25, down 79,000 barrels per day from the previous week's average. Refineries operated at measly 85.4 percent of their operable capacity. Over the last four weeks, motor gasoline demand has averaged nearly 9.3 million barrels per day, up by a lower than average 0.4 percent from the same period last year. Distillate fuel demand has averaged about 4.3 million barrels per day over the last four weeks, up 0.7 percent from the same period last year. Jet fuel demand is 4.2 percent lower over the last four weeks compared to the same four-week period.   These are weak figures reflecting a weak economy.  

Biding her time, Senator Hillary Clinton said, according to the Financial Times, that she was convinced that energy companies were manipulating oil prices and vowed to launch an investigation. Yet I have a question. Seeing that presidential hopeful Hillary Clinton is already a Senator, couldn't she launch her investigation now? Why does she have to be elected President? Hillary called for probes by the Department of Justice and the Federal Trade Commission and promised to challenge OPEC, the producers' cartel on its role in the alleged manipulation. Of course if Hillary is not elected President, well then, never mind.              

It was a week that saw oil test the highs and fall only to defy the dollar and the employment report. Wild movement   indicating a major top with wild volatility in energy have day-traders rejoicing.  

It's great to be back and judging by my Emails I was missed! Thanks for everything oh loyal readers! Also please feel free to call me at 800-935-6487 or email me at pflynn@alaron.com to open your account.  

Stopped on short June crude from apprx 11830 at apprx 11930. Sell June crude at 11970 - stop 12070.  

Stopped on long June heating oil from apprx 32400 at apprx 32600! Sell June heating oil at 30700.  

Stopped on short June RBOB from apprx 30300 at apprx 30500. Sell June RBOB at 30800 - stop 31000.  

Buy June natural gas at 1060 - stop 1030.

Have a GREAT day!

Phil Flynn

Alaron Research Team

800.563.9510

pflynn@alaron.com

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