Energy Market Updates

Wild May Ends in Wild Fashion with HEAT retracement

Lets take a minute to put this month into perspective as we all recognize our short memories. On May 1, HO opened at 3.1783. Todays close of 2.7062 is an astounding .4721 cent retracement. For several weeks we spoke of a fall to the 2.75 level on prompt month Heat, and it has become a reality. With the majority of talk centered around the ongoing European crisis, today saw more length shed from Commodities on the heels of continued growing Crude stocks and some uninspiring job data. The delayed DOE report showed Crude adding 2.2mbbls against an expected build of 800k, yet gasolines fell 832k and a rather bullish distillate draw of 1.7mbbls, verses expectations of +200k and +500k respectively. Traders apparently feel that Crude levels are so robust, it far outweighs and week to week changes in refined products. Secondly, ADP's monthly report on new job growth fell short of expectations as it showed 133k unit gain. Support that figure was new jobless claims rose by roughly 10,000 this past month. All in all, the market continues to search for a bottom as the US dollar gains strength and length is pulled from Commodities. At the close, Crude fell 1.29 to $86.53, RBOB lost .0332 to $2.8250 and HEAT slipped another .0336 to $2.7062

Daily Heating Oil Chart

Heat map

RBOB CLOSE
CLOSE CHANGE
 
JUN 28250 -.0332
JUL 27227 -.0512
AUG 26676 -.0477
SEPT 26244 -.0444
OCT 24770 -.0430
NOV 24442 -.0408
HEAT CLOSE
CLOSE CHANGE
JUN 27062 -.0336
JUL 27032 -.0406
AUG 27130 -.0403
SEPT 27249 -.0394
OCT 27375 -.0385
NOV 27507 -.0380
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European Zone Crisis pushes Futures Lower

For the last several days NYMEX values have been on the losing end of good Ol' fashion Donny Brook coming at the hands of the ongoing European debt crisis. With new Leadership installed in several countries, investors are not taking any chances and removing cash as quickly as possible. The latest round today had the European Central Bank preparing for Greece's exit from the Euro sending the currency to a four month low versus the US dollar. Commodities again were the collateral damage as money continues to exit the pits. Japans signs of economic recovery from their recent natural disasters, reports showed a 1% increase in their economy, along with an anemic Jobless claim report ( statically flat) could not stop the bleeding in the pits today. When prompt Heat was at 3.30,we noted the major support level to be at 2.75 with a few stop along the way and a key being 2.95. As those levels have been broken, it will be interesting to see where we stop. Interesting to note the seaway pipeline that runs Crude north to Cushing, OK has just finished a flow reversal that will allow product to move south from Cushing to the Gulf region for refining. Product is expected to flow this weekend, alleviating the glut of WTI in the US, should also play a role in reducing the Brent - WTI spread. At the close Crude lost .25 to $92.56, HEAT fell .0486 to $2.8490 and RBOB lost .0427 to settle at $2.8782.

 

Daily Heating Oil Chart

daily heat map

RBOB CLOSE
CLOSE CHANGE
 
JUN 28782 -.0427
JUL 28174 -.0477
AUG 27737 -.0494
SEPT 27354 -.0497
OCT 25962 -.0482
NOV 25643 -.0477
HEAT CLOSE
CLOSE CHANGE
JUN 28490 -.0486
JUL 28556 -.0483
AUG 28641 -.0478
SEPT 28723 -.0474
OCT 28804 -.0467
NOV 28889 -.0462
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