In the energy market, crude oil for September delivery rose 89 cents from Thursday to close at $68.05/barrel. August reformulated gasoline rose a quarter of a cent to finish at $1.9159/gallon. Despite continued worries that oil’s recent run-up can’t be justified by market fundamentals, crude continued to climb Friday on the back of a weaker dollar and stubbornly resilient equities.

“The debate between whether the market should focus on green shoots or current weak demand and over supply goes on,” said Phil Flynn, vice president at futures trading and research firm PFG BEST Research.

“The green shooters have had the upper hand this week, but the real test will be next week,” Flynn added.

“Although we cannot discount further gains, we are somewhat wary about jumping in on the long side at this late stage,” said Edward Meir, analyst at MF Global.

“The stock market advance, in particular, looks somewhat overextended,” Meir

Base metals were mixed on Thursday. Copper fell 1.25 cents to close at $2.4893/lb. Nickel gained just over 1 cent to finish at $7.2998/lb. Zinc lost almost one penny, ending at $0.7450/lb. Aluminum rose a cent and change, closing at $0.7798/lb., while lead moved to $0.7719/lb., down half a penny from the previous session. Despite copper’s slight pullback, investors remain mostly bullish, encouraged by what they see as an improving outlook on demand and economic recovery.

“The overall sentiment in the metals market has improved a lot,” said Yingxi Yu, an analyst at Barclays Capital. “It has not much to do with the dollar, but follows stock markets closely, as the second quarter’s corporate earnings were broadly better than expected, improving outlook on the economy.”

Copper supply concerns also underpinned the bullish sentiment. Violence was reported near Freeport-McMoRan’s massive Grasberg mine in Indonesia, and a power problem occurred at Anglo American’s

Gold jumped up about midway through trading in the Far East and continued its rise through London and the Comex open to an intraday high just north of $955. But at around 10 a.m. in New York the yellow metal got knocked down below $950 where it stayed through the Globex close, finishing at $949.10/oz., up $11.40. Overnight, gold is little changed.

Platinum experienced a sharp sell-off late in Hong Kong, but clawed its way back to post a decent gain for the day, closing at $1181/oz., up $9. Overnight, platinum is slightly higher.

Silver made big gains through Hong Kong and early London trading that were far too substantial to get wiped out by the 10 a.m. sell-off in New York, after which it remained range-bound between $13.60 and $13.65 and closed near the middle at $13.63/oz., up 22 cents. Overnight, silver is trending lower. (Click here for

Risk aversion returned to markets on Thursday, supporting the U.S. dollar and government bonds, after mixed economic data, while concern about the possible failure of a small U.S. lender sparked caution following the week’s robust gains in stocks.

Oil hovered around $61 a barrel as worry about the strength of global fuel demand was offset by news of strong economic growth in China.

The U.S. dollar initially fell to a six-week low against major currencies after JPMorgan’s reported record investment banking and trading results, providing further evidence of recovery in the financial system, but weak U.S. manufacturing data and concern about the impact of the possible failure of U.S. lender CIT re-introduced a bid for safer-assets.

CIT’s talks about aid with the U.S. Treasury ended Wednesday night, leaving the lender to its own devices, and endangering the future of some of the one million customers of the lender to small businesses. U.S. Treasury debt

In the energy market on Wednesday, crude for August delivery accelerated its slide, closing at $60.14/barrel, down $2.79. August reformulated gasoline lost 9.95 cents, to $1.6333/gallon. In its weekly inventory report, the Energy Information Administration said that crude stocks fell by 2.9 million barrels in the week ended July 3, slightly less than anticipated. gasoline supplies rose 1.9 million barrels, and distillates were up 3.7 million barrels. Refineries were operating at 86.8% of capacity last week, vs. the previous week’s 87%.

There were no great surprises in the report. However, there was an uptick in crude inventories at Cushing, Okla. — the delivery point for crude futures traded on the New York Mercantile Exchange. They jumped to 30.2 million barrels last week, up 5.6%, which added a bit of pressure to futures prices.

Summing up, “The market is adjusting itself,” said Michael Fitzpatrick, of MF Global. “In the past few weeks,

In the energy market on Tuesday, crude for August delivery prolonged its slide, closing at $62.93/barrel, down $1.12. August reformulated gasoline lost a penny, to $1.73/gallon. Economic worries seem to have firmly established themselves at the driver of the moment. “The market got way ahead of itself with hopes that the [global economic] recovery would be quick,” said Zachary Oxman, managing director at TrendMax Futures.

“I think the dips you are seeing now are preceding the next big down move in stocks and commodities as well,” Oxman added. “I’d be net short, with a trading bias to the short side.”

Another bear is Edward Meir, of MF Global, who wrote that, “Despite the string of declines hitting the crude-oil markets of late, we do not think the current selling bout is over just yet … The markets remain vulnerable to a poor fundamental backdrop, typified by high stocks and lackluster

In the energy market on Monday, crude for August delivery shot higher, closing at $71.49/barrel, up $2.33. July reformulated gasoline gained 6.2 cents, to $1.936/gallon.

Crude pushed upward after an attack on an oil platform in Nigeria rekindled supply worries, and provided “the big underpinning for oil,” said Kevin Kerr, president of Kerr Trading International.

The Movement for the Emancipation of the Niger Delta (MEND) said that it had struck at the Shell Forcados offshore platform in Delta state. That was a disappointment, after militants said late last week that they are prepared to lay down their weapons while they consider an amnesty offer from the central government.

Kerr added that “if the dollar fails to hold support [at current levels], it’s likely crude will rally further.”

But Edward Meir, of MF Global, wrote that, “Outside of a sharply weaker dollar, we do not see any imminent factors that could see crude-oil prices

The base metals took another bath in blood on Monday. Copper plunged from the pre-dawn hours to the New York open, rallied back to mid-morning, but then sold off again to finish just off its intraday lows at $2.2643/lb., down 8 cents.

Nickel fell back to $6.80, held there until mid-morning, but took a second beating from there to end at $6.6247/lb., down 38¾ cents. Zinc hit the same morning sell point, going from near even to just off its intraday lows at $0.6972/lb., down 4¾ cents. Aluminum rallied late in the day but still shed more than a penny and a half, to $0.7149/lb., while lead also bombed out, dropping 5 cents, to $0.7463/lb.

Copper led the second straight day of major retreat among the industrial metals, as the stronger dollar hammered commodities across the board.

And, as MF Global analyst Edward Meir put it, “The correction is likely

Inflation Hedging: Four Ways To Protect Your Investment Portfolio

by David Fessler, Advisory Panelist

Right now, the markets are caring about one thing: inflation. And they’re starting to get a little edgy. They need inflation hedging…

Why? The U.S. Treasury is printing money and dumping it into the financial system at historically unprecedented rates, in an effort to stimulate the economy.

Chances are good that the Fed won’t know when to stop the printing presses. Continuing to print money only exacerbates the inflation problem and deepens the hole.

And it’s quite a hole.

Jessica Hoversen - Fixed Income Analyst at MF Global - had this to say yesterday on CNBC: “The ratio of U.S. budget deficit to [gross domestic product] GDP is at the highest level since World War II.”

The government thought process goes something like, “If some stimulation is good, more will be even better.” And most politicians, who are

In the energy market on Monday, crude for June delivery pushed to a better than 5-month high, closing at $54.47/barrel, up $1.27. June reformulated gasoline gained 6.86 cents, to $1.586/gallon.

Traders were upbeat after the home sales numbers and a report out of China that its PMI had also risen, for the second straight month.

It’s also “following stocks higher,” said Phil Flynn, of Alaron Trading.

There was a bit of wariness, though, with inventories remaining at 19-year highs and the bank stress tests looming.

“We are somewhat apprehensive about price prospects for energy over the short term in light of the stress-test results due to be announced later this week,” said Edward Meir, of MF Global (NYSE:MF).

“Both the commodity and equity markets have already pushed substantially higher in response to the slight improvement in the macro statistics,” Meir added.

Source: Oil Moves Higher