Alaron Energy Comment

CHICAGO - Jul 21/08 - SNS -- Following is the energy futures comment from Alaron Trading Corp.

 Well hello Dolly, well hello Dolly, it's not so nice to have you back where you are now.  Just one day after I paid just $3.99 for a gallon of gas, the third or fourth named storm of the hurricane season threatens the Gulf of Mexico depending how technical you want to get.

Dolly is no  sheep but tropical storm Dolly may become a hurricane today and is a bigger threat in oil terms than tropical storm Cristobal that is moving up the East Coast. Dolly on the other hand will cause some problems for oil. According to the national Hurricane Center in about 5 days Dolly will be plowing into the Mexico Texas border.   Before it does that it will hit the Yucatan peninsula and depending on where it hits  it may influence the storms direction after it enters the Gulf. Bloomberg News says there is a 29% chance that the storm will become a hurricane when it gets to the Gulf. It looks like we are trading hurricane mode and we will most likely buy the rumor and sell the fact as we hope that Dolly's bark will be worse than her bite.  Dolly is no dog  but is expected to become a category one hurricane.

As Bloomberg reminds us,  the Gulf of Mexico accounts for 25% of the US daily oil production and  Dolly's projected path over the tip of the Yucatan Peninsula takes it north of Campeche Bay, where Petroleos Mexicanos produces about 1.07 million barrels of oil a day

So much for high level talks with Iran. The oil market sold off hard last week in part on hopes that talks with Iran might diffuse some of the rising tensions that have driven oil after war games and rumors of Israeli attacks and even photo-shop. Of course Iran is hell-bent on enriching uranium and the US is hell bent on stopping them. The Wall Street Journal reports today that the US is fine-tuning new financial penalties against Iran that would target everything from gasoline imports to the insurance sector and the prospects of such sanctions grew after talks over its nuclear fuel program this weekend made no progress. The Journal says that US and European officials will intensify efforts to impose penalties if their diplomatic drive fails to induce Iran to freeze its programs.

So it looks like we are back to worry mode so get out your security blanket and get ready to be nervous as we will watch the weather maps and keep an eye on Dolly.

Make sure you watch me on  the new and exciting  Fox Business Network! Also sign up for your free trial of Alaronenergies and open your trading account! Just call me at 800-935-6487 or email me at pflynn@alaron.com

Sell August crude at 13300 - stop 13600.

Buy August RBOB at 31550  - stop 30700.

Sell August heating oil at 40100 -  stop 40300.

Buy August natural gas at 990 -  stop 970.

Have a GREAT day!

Phil Flynn

Alaron Research Team

800.563.9510

pflynn@alaron.com

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