Energy Market Updates

Spanish Banking Bailout causes Stir, Only to Falter

  

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For many of us who log in to check the market on Sunday evenings at PM, it is often times like Christmas morning to see what the surprise will be. Last night we got a lump of coal to see Commodity futures skyrocketing on news of a Spanish banks receiving a $120 billion dollar bailout. Heating Oil was as high as +.07 at one point. The infusion of cash looks to signal that the Euro will be around for a while longer. As the sun rose, the speculative gains were peeled away and the wheels fell off the cart with about an hour left in the session. Crude finished less $1.40 to close at $82.70, RBOB slipped .0286 to $2.6566 and HEAT fell .0364 to $3.6357, a whopping .11 cents lower than Sunday evening. It appeared that the bullish appointments on the calendar just could not keep the rally going. Next week, Greece has elections, Iran is set to meet with a group of five Nations on its nuclear program with Israel going increasingly impatient and the scheduled FOMC meeting. Many have commented on the limit to the downside in the pits after retracing some 60 cents in the last 50 days. With Europe still not out of the woods, the trend is your friend.

Daily Heating Oil Chart

Futures Continue to Rise as All Eyes on Iran

  

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RBOB CLOSE

CLOSE CHANGE MAR 30877 +.0175 APR 32630 +.0145 MAY 32536 +.0151 JUN 32249 +.0160 JUL 31842 +.0158 AUG 31372 +.0150 HEAT CLOSE CLOSE CHANGE MAR 32724 +.0331 APR 32650 +.0302 MAY 32509 +.0271 JUN 32417 +.0250 JUL 32429 +.0232 AUG 32445 +.0211

NYMEX continues higher ahead of DOE data

  

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With the Heating oil pit tacking on over 15 cents in just under a week, many are scratching their heads as to why.  In a winter that has seen more 50 degree days than teens, most would assume the Heat pits to be tanking.  As with the case with these types of patterns, shifts in the jet stream have caused the Northeast to have a mild winter yet Europe is caught in a bitterly cold spell for some time.  Brent Crude has maintained its $20 premium to its cousin WTI, thus explaining the HO to WTI disconnect.  As shown below, that disconnect has been in place most of the year.   Longer term, you may start to see more US vessels head to European markets, signaling some shortfalls down the road.  Many are still on edge as Greece is continuing to try and find a way to pay off creditors and with Iran and Israel in a stare down, the tightening supplies across the pond are having nothing but bullish affects on the trade.  At the close, Crude added $1.50 to $98.41, RBOB slipped .0004 to $2.9275 and HO gained another .0343 to $3.1909.  Again we have touched the top of the 18 month range for HO, then next 30 days have typically seen a healthy pull back.  But again, what is typical anymore?

Late Rally pushed Futures higher ahead of the Close

  

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Futures danced along the even mark most of the day with little news pushing the market for much of the session.  Greece is still trying to get a break on the 14.5 billion it owes creditors come mid March.  US Carriers have moved through the Straits of Hormuz with little in the way of disruptions.  A European refiner filed for bankruptcy, Petroplus, as margins disappeared.  Two of the most notable market moving stories were that the IMF revised down the world economic growth pointing to a slower than expected growth rate over the last five months.  Ahead of the close, the spendingpulse survey (a Mastercard service) pointed to higher gas demand last week.  How much credence is given to this survey has always been a debate, a weekend snow event in the northeast might have boosted sales on Friday.  Nonetheless, most will be looking at Wednesday's DOE report which is expected to show moderate builds across the board.  It looked like heat was on a pretty good downward slide until the last two sessions, which really doesn't make sense if you look at the 7 to 10 day outlook which has temperatures in the Northeast well above normal levels.  At the close Crude lost .63 to $98.95, RBOB rose .0271 to 2.8050 and HEAT added .0144 to $3.0242.