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Two Ways To Play: Chevron's Crude Awakening

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Strengthen your portfolio in good times and bad.

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Chevron Warns on Outlook

All eyes are on the jobs report this morning, but energy traders are also paying attention to news from Chevron (CVX). According to Bloomberg, the second-largest US oil company said it expects fourth-quarter net income to come in "significantly lower" than the previous quarter. Lower crude and natural gas prices are finally exacting a toll.

Chevron's oil production fell throughout 2008, dropping 6% quarter-on-quarter and 16% year-over-year. Fourth-quarter output will likely be the lowest since 2004. The company reports official results on January 30.

From the Bull Pen: Crude oil in contango has energy bulls concerned, but watch the behavior of Chevron if the stock falls to $70. If it holds, it still maintains the uptrend. One can set an initial position here with a sell stop below that level.

From the Bear Cave: For those that believe crude oil will hover near $30 a barrel in 2009, one can play the downside in the Oil ETF (USO). An initial position can be set here with a buy stop can be set above $35.


Quick Check Around the World

Asian trading closed with the Hang Seng -0.27%, Nikkei -0.45%, Sensex -1.88%, Taiwan -0.73% and Shanghai 1.42%.

Glancing towards Europe, we see the CAC -0.14%, DAX -0.07%, FTSE -0.48%

As of 8:15 a.m. EST, S&P futures are trading -3 to 903.00, and Nasdaq futures are -5 to 1245.00.


A Look At Commodities

Crude oil
is trading -0.68 to 41.02. Gold is +4.60 to 859.10. Silver is +0.14 to 11.245, and copper is +2.95 to 150.85.

The dollar index is +0.090 to 82.4250.


On the Radar

Economics

08:30 Change in Non Farm Payrolls -475k
08:30 Unemployment Rate 7.0%
08:30 Change in Manufacturing Payrolls -100k
08:30 Average Hourly Earnings 0.2%
08:30 Average Weekly Hours 33.5
10:00 Wholesale Inventories -1.0%

It's Friday! Good luck and have a great weekend!

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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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