Energy Market Updates

Last week we mentioned that it was going to be a sloppy back and forth week if a debt ceiling resolution was not passed.  As shown below, that was exactly what materialized.  Starting the week, HEAT was at 3.1280 and finished today at 3.0962 with all sorts of gyrations in between.  As traders are not willing to commit either way as a resolution  still looms and a tropical storm hitting the gulf region, it was somewhat surprising to see the market fall off as much as it did mid session.  Both products were down as much as 4 cents on the heals of GDP data being released which showed the economy was basically flat.  Furthermore, it notes that the recession  was deeper than first thought and the economy is obviously growing at a much slower rate.  There is growing sentiment that we will begin to encounter demand destruction at a growing rate if prices do not ease relatively quickly. At the close Crude fell $1.74 to $95.70, RBOB lost .0047 to $3.1129 and HEAT fell .0090 to $3.0962. This weekend will be critical as to how the Markets will shake out for the next few months, as a resolution should see lower prices

Crude once again danced above the $100 a barrel mark today as many speculated that the economy is showing signs of improving.  Furthermore a marathon meeting session on Greece of European Leaders ended with a consensus that they will throw more money into the debt strapped country.  The Euro rose on the news as the dollar fell, thus pushing money into Crude.  The products failed to follow the rally.  RBOB slipped .0475 to $3.0995 while HEAT lost .0192 to $3.0992.  All while Crude managed to gain .73 to close at $99.13, more than a full buck off its high of $100.16.  Holding down products appear to be the fact that demand is still soft, and retail gas stations are still in the high $3 range.  Additionally, our friends at the IEA stated that they are willing to release more product to the market to stave off any spike in futures.  HEAT remains in a congested selling pattern and looking back over the last few months, you have seen healthy corrections after these periods.  In laymen terms, nobody is willing to make a move either way until an event pushes us too.  This event will likely be in the form of how the US debt ceiling issue is resolved, meaning we probably have another week of sloppy back and forth days