Alaron Energy Comment

CHICAGO - May 12/08 - SNS -- Following is the energy futures comment from Alaron Trading Corp.

Earth Shattering! Oil traders rocked the world last week shattering one record after another. Can oil follow up on its phenomenal performance this week?

Or has this oil  run gone about as far as it might go? Technically the next target is $130 but the key to hitting that level soon will be the news. The bulls must be fed every day with bullish stories to continue to justify these lofty levels.

Today reports of a 7.5 earthquake in China are shaking things up  and the oil market seems to be on shaky ground   not because of the earthquake but because of the relentless rally from the dollar. It  is showing some strength and that may pressure us unless we get that bullish headline.

Friday the rally story of the day was the Wall Street Journal Report that Venezuelan President Hugo Chavez had given support to rebels attempting to overthrow Colombia's government. The Wall Street Journal reported that files found on a dead rebel leader's computer seems to suggest that Hugo Chavez was giving support to the rebels and giving them arms. If proven Venezuela may face sanctions by the US and others.  If we do put sanctions on Venezuela that would raise the price of oil as Venezuela and the blustering Chavez would threaten to cut off our oil supply. That would send a shock to the market and prices would rise but the truth is  Venezuela would still sell their oil. Not directly to us but because oil is a fungible commodity we still would not run out of oil. It would just cost more.

The Financial Times reports that Royal Dutch Shell and Spain's Respol have pulled out of 10 billion dollar plus Iranian gas project, as the US increases efforts to isolate Tehran over its nuclear program.

Check me out on the Fox Business Network! Also call to get your free trial of Alaronenergies! Call me at 800-935-6487 or email me at pflynn@alaron.com to open your account!  

Buy June crude at 12100 - stop 11950.

Buy June heating oil at 33000 -  stop 32700.

We're short  June RBOB from apprx 31900 - stop 32100.

Buy June natural gas at 1100 - stop 1070.

Have a GREAT day!

Phil Flynn

Alaron Research Team

800.563.9510

pflynn@alaron.com

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