Crude oil was higher for the first time in 4 sessions but we only gained 70 cents after the $7 rout; that is not much. It appears that buyers are emerging but we would suggest waiting for the inventory number this week before establishing fresh positions. For now, $70 should support and $73 should act as resistance in the March contract. Natural gas reversed to close down almost 2% on the day. Clients are flat; though we think lower pricing is likely, we wish to have no exposure. Clients are starting to buy June RBOB call spreads anticipating prices to get back above $2.20 in the coming months; we like this trade and clients currently own $2.16/2.28 spreads.

We will be looking to sell rallies in the ES and SP for clients; we see resistance at 1069, 1084, 1100. Continue to scale into short exposure in the Euro-dollar! Clients were advised to go long the Aussie today via June 90 cent calls; today at just under $1400/per. Additionally currency traders are still long the Euro and short the Yen. This trade got a little better today but clients are still under water.

Oil and related ETFs have experienced huge gains off its last year’s low, and energy companies have pocketed most of the change. However, the oil industry is expanding its options into other energy fields as it anticipates the eventual depletion of oil reserves.

Big western oil companies are trying to sustain reserves by expanding through acquisitions and investment, according to The Economist. For instance, Exxon Mobil (NYSE: XOM) estimated that exploration and capital spending hit $27.1 billion in 2009, or 4% higher than in 2008. The company also expects to continue spending around $25 billion to $30 billion a year over the next five years for the same purpose.

My other article discussed how the Pickens' Plan would affect the crude oil picture. Here I'll take a look at whether the natural gas would be available to convert cars and trucks to natural gas.

Figure 1 shows the where the US got its energy from in 2008: