Energy Market Updates

Futures Slip with Mixed Inventory Report

Much of the morning session saw values bounce around from positive to negative as pre DOE posturing held court.  Also holding weight was the curiosity factor of what was going to happen at the European Summit to discuss the ongoing debt issue.  As the news of a Crude build of 4.7mbl, a Distillate draw of 4.3mbl and a Gasoline draw of 1.4mbl hit the wires the initial reaction was bearish as the huge glut of Crude took center stage.  That was short lived as many looked to distillates as the leading pit and another large draw has now put distillates stocks smack dab in the middle of the 10 year range.  Over the past several weeks we have operated on the higher end of that range.  The selling only hit the floor with about 30 minutes left in the session as continued optimism remained that a long term solution to Europe's debt crisis will be agreed upon.  Signs pointed that way as earlier in the day, Germany, a key figure in the deal, voted to add more to its growing rescue fund.  An effort in that other nations will follow.  While we still are on the high end of the range, and a solid down day is refreshing, nothing out there is a clear signal that we are ripe for another pull back.  Again, the HEAT pit appears to be comfortable trading in the wide range from 2.70 to 3.10.  At the close, Crude lost $2.97 to $90.20, RBOB fell .0482 to $2.6516 and HEAT lost .0344 to $3.0158. 
heat map
RBOB CLOSE
                 CLOSE       CHANGE 
  
NOV    26516       -.0482
DEC    26253      -.0494
JAN    26111      -.0474
FEB   26049      -.0445
MAR   26075      -.0416
APR    27387      -.0374
HEAT CLOSE
          CLOSE    CHANGE
NOV    30158     -.0344
DEC   30210      -.0302
JAN   30101       -.0304
FEB   29929      -.0316
MAR   29663     -.0323
APR   29260      -.0312
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NYMEX Remains Volatile with Ghadaffi Death

With an early morning report of the death of the former Libyan dictator, I would have bet the house that it would be received as bearish news. As the morning started off up strong in both pits, the slow chipping away at values as many digested what this really meant to oil markets. Two distinct camps once again. One side believes Libyan oil, about 1mb per day capacity, will now find its way into friendlier markets, pushing values down. The other warns against an ongoing struggle within the Country as a vacuum occurs and a new regime comes into power. Sometimes the devil you know is better than the devil you don't. With Barclays reporting today that the death, while important, will do little to the "underlying dynamics" of the situation. That is, roughly 50% of the countries production is for domestic use. The Bulls won on the day in similar fashion as the Bears won yesterday, a late rally with less than an hour left tin the session. RBOB was down over .07 at one point to finish up .0040 to close at $2.6755, HEAT added .0489 to $3.0301 (some .06 off the days low). Yet again, WTI shed gains while its stepchildren added, finishing down .81 to $85.30. HEAT still is at the top end of the range as the chart below shows, many are convinced we will continue the cycle and see a sixth attempt at the 2.70 level.
heat chart
RBOB CLOSE
CLOSE CHANGE
 
NOV 26755 +.0040
DEC 26570 +.0121
JAN 26466 +.0168
FEB 26415 +.0175
MAR 26424 +.0169
APR 27606 +.0180
HEAT CLOSE
CLOSE CHANGE
NOV 30301 +.0489
DEC 30266 +.0466
JAN 30130 +.0418
FEB 29925 +.0382
MAR 29641 +.0354
APR 29203 +.0335
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Values rise on sixth day on European debt news

The fuel pits definitely have their rally hats on as for the sixth consecutive day we have seen an increase in pricing. Today had very little bearish news in market which to some indicates the rally may be running out of steam. Heat closed up .0306 to $2.9347, (up over .20 in this rally all together. see chart below) while RBOB added only 11pts to $2.7487 and Crude actually slipped .24 to $85.57. As we come out of the fall turnaround season for refineries, most are expecting a final round of draws across the board in tomorrows delayed DOE report. The main driver of todays movements were centered around an apparent resolution and pending ratification of a European debt plan, one that Germany and France can agree upon. The dollar slipped and the DOW soared, currently up 200pts and pushing into positive territory for the year. The release of the FED minutes on last months meeting did little to shake investors as it is said they are anything but marginally optimistic on a slow growth period until years end, which was somewhat of no brainer. So with all the bullish news out today, and for only HEAT to be up strong, it can be viewed as sort of a winning day for bears. We will wait until Thursday's Inventory report to plant our flag on either side of the fence, but as mentioned, HEAT looks to be content between 2.70 and 2.90, wide range but nonetheless defined.
heat map
RBOB CLOSE
CLOSE CHANGE
 
NOV 27487 +.0011
DEC 26846 +.0082
JAN 26522 +.0136
FEB 26355 +.0145
MAR 26324 +.0139
APR 27382 +.0163
HEAT CLOSE
CLOSE CHANGE
NOV 29347 +.0306
DEC 29300 +.0263
JAN 29226 +.0222
FEB 29074 +.09074
MAR 28862 +.0147
APR 28487 +.0125
 
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