Oil And Commodity Summary:

Hanging On The Headlines

The oil markets are positioned for a significant move, as several factors are converging.

The combination of an increasingly complex situation in Lebanon, refinery problems around the world, increasing problems in Nigeria, a major heat wave, the onset of the usually difficult part of hurricane season, and increasing demand for gasoline, are keeping prices stable or on the rise accross the board.

Major oil companies have been hitting home runs on their earnings reports, and natural gas, the laggard in the energy complex seems to be on the move.

Natural gas stocks remain near a significant break out point, while the Amex Oil Index (XOI) is flirting with all time highs, even as some of its components, such as Exxon Mobil trade at low price/earnings multiples.

If the Amex Natural Gas Index (XNG) closes above the 440.445 area, we could see significantly higher prices.

The key is supply, and government figures are due out later this morning. See our energy section for individual stock picks and updates.

Natural gas prices rallied on a decrease in supply, just as hurricane season hits the often volatile August period.

Crude oil prices have remained steady over the last few days, but large oil stocks continue to test their all time highs.

Especially strong are Exxon Mobil (NYSE: XOM), Marathon Oil (NYSE: MRO), and Chevron Texaco (NYSE: CVX), with the key being retail gasoline, and natural gas supplies. Dr. Duarte owns shares in Texaco.

The $80 mark for crude oil looks like a distant goal for oil bulls at the moment, barring an escalation of the Middle East conflict, or another external event such as a major hurricane hitting the Gulf as happened last year.

If crude oil prices can climb and stay above $80, though, for whatever reason, we could finally see that melt up in prices that has been predicted for some time.

Any mechanical failure at any key refinery, transportation, or production facility, could trigger a significant increase in prices.

The Wilderhill Clean Energy Index is still lagging the rest of the energy sector, but is trying to form another base near 180. This index is in a well established down trend.

The Philadelphia Oil Service Index (OSX) is back above the 200 area, and its 200 day moving average.

The Amex Oil Index (XOI) made an all time high on 7-26.

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