Refinery Explosion and Storm Fears Push RBOB Higher

Posted by Mark Pszeniczny on Aug 28, 2012 8:11:00 AM

The speculators jumped on the buying train as soon as trading opened Sunday evening and we saw RBOB jump to as high as 3.2050 (+.1250)before cooling off ahead of open outcry. The Explosion at the 650k bpd Amuay refinery in Venezuela is said to have caused at least 25 deaths and substantial damage to the surround area. With all the devastation, the unit is said to be back online by the end of the week. This facility is said to supply roughly 360 bpd of gasolines to the east coast. Additionally, the threat of Hurricane Isaac to the Gulf region has skyrocketed RBOB values. The storm, expected to make landfall sometime Tuesday evening, appears to be taking the same path as Rita and Katrina. This time however, it is much smaller in size and most offshore rigs have been evacuated and shutdown. The key to remember about storms is while it does take product off the market, it also reduces demand. The fact that HEAT finished marginally higher is a big win for Bears, considering it was up over .07 at one point. At the Close, Crude actually closed down .68 to $95.47, HO was up .0017 to $3.1118 and RBOB jumped .0768 to $3.1548.


weekly heat chart

Close Change
SEP 3.1196 +.00170
OCT 3.1195 +.00080
NOV 3.1196 -.00540
DEC 3.1186 -.00920
JAN 3.1162 -.01210
FEB 3.1013 -.01380
Close Change
SEP 3.1548 +.0768
OCT 2.9500 +.0395
NOV 2.8389 +.0049
DEC 2.7747 -.0112
JAN 2.7450 -.0180
FEB 2.7387 -.0209

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Topics: RBOB, Venezuela Refinery Explosion, Hurricane Isaac

Futures Spike on Bullish DOE Numbers

Posted by Mark Pszeniczny on Aug 1, 2012 4:01:00 PM

After last nights API data release that showed Crude suffering a massive 11.2 mbl draw, most were awaiting todays DOE numbers with one eye closed, hoping it was an aberration. For those watching the screens at precisely 10:30 this morning you saw Rbob spike 4 cents and HO jump 3. While not as horrific as an 11 million barrel draw, Crude still lost 6.5mbl according to the DOE. Gasolines fell 2.2mbl and distillates fell 974k. Still, far more than expectations. Other Bullish influences to the Market early were the Federal Reserve meetings that many had been betting on another round of stimulus. That gamble didn't pay off as a short time ago they announced that while the economic turn around has slowed, it doesn't warrant another round of stimulus... yet. The interesting note to the entire session is that Crude, at its peak today, was only up $1.50. In the last half hour of the trade, HO looked to be going negative as the air was let out of the balloon. RBOB inflated to much to peel off any of the gains and finished up .0599 to $2.8342, HO gained .0108 to 2.8588 and Crude added .85 to $88.91. Thursday sets up to be another exciting day with Jobless figures due out at 8:30.

Heat map

SEPT 28342 +.0599
OCT 26281 +.0447
NOV 25322 +.0401
DEC 25398 +.0370
JAN 25282 +.0334
FEB 25322 +.0320
SEPT 28588 +.0108
OCT 28663 +.0105
NOV 28748 +.0101
DEC 28819 +.0108
JAN 28869 +.0113
FEB 28831 +.0104
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Topics: DOE, Daily Heating Chart, RBOB, Crude draws, Stimulus

Weekly DOE Petroleum Snapshot

Posted by Mark Pszeniczny on Jul 18, 2012 2:35:00 PM

As always, the EIA site is an invaluable resource for snapshotting inventory, futures and spot pricing. I've highlighted some relevant snapshots below, but for more information you can also visit this will allow you to reference any of the weekly/daily inventory reports (weeklys are published every Wednesday)

Here are the majors:

Trade estimates 7 18 12DOE Change 7 18 12API Change 7 18 12 


The weekly inventory report on US and PADD1 Crude is:

Figure 1. Stocks of crude oil by PAD District, January 2011 to present


Heres a snapshot of spot pricing this week:

spot pricing DOE report




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Topics: Inventory report, DOE

Spanish Banking Bailout causes Stir, Only to Falter

Posted by Mark Pszeniczny on Jun 11, 2012 3:24:00 PM

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

heat map

JUL 26566 -.0286
AUG 25877 -.0338
SEPT 25322 -.0378
OCT 23775 -.0387
NOV 23511 -.0388
DEC 23428 -.0365
JUL 26357 -.0364
AUG 26394 -.0357
SEPT 26468 -.0350
OCT 26558 -.0352
NOV 26676 -.0352
DEC 26789 -.0354
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Topics: Iran, European Economy, Spain Banking Bailout, Euro Debt Zone

Wild May Ends in Wild Fashion with HEAT retracement

Posted by Mark Pszeniczny on May 31, 2012 5:23:00 PM

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

JUN 28250 -.0332
JUL 27227 -.0512
AUG 26676 -.0477
SEPT 26244 -.0444
OCT 24770 -.0430
NOV 24442 -.0408
JUN 27062 -.0336
JUL 27032 -.0406
AUG 27130 -.0403
SEPT 27249 -.0394
OCT 27375 -.0385
NOV 27507 -.0380
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Topics: Jobless claims rise, HEAT, CRUDE

European Zone Crisis pushes Futures Lower

Posted by Mark Pszeniczny on May 17, 2012 3:44:00 PM

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

JUN 28782 -.0427
JUL 28174 -.0477
AUG 27737 -.0494
SEPT 27354 -.0497
OCT 25962 -.0482
NOV 25643 -.0477
JUN 28490 -.0486
JUL 28556 -.0483
AUG 28641 -.0478
SEPT 28723 -.0474
OCT 28804 -.0467
NOV 28889 -.0462
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Topics: European Economy, Greece, Brent Crude, Brent vs WTI, Euro Debt Zone

Morning Losses Erased with Jobs News

Posted by Mark Pszeniczny on Apr 26, 2012 5:50:00 PM

For the second day in a row, early session losses were erased with strong closes. Todays bullish action came on the heals of a surprise increase in jobless claims and some cautiously upbeat comments the Federal Reserve. Commenting on the role of the Fed, Bernanke said ultra low rates would remain in effect through 2014 and did not rule out additional measures to pump up the economic situation. Commodities are the collateral damage of such news as the dollar again took a hit and caused the pits to show strong gains as the day wore on. Crude settled at $104.55 up .43, RBOB added .0276 to close at $3.1833 and HO took the lead gaining .0333 to $3.1944. Heat has come back with vengeance after touching 3.09 on the prompt month just over a week ago. There is fair amount of commentary out there that we should see substantially lower numbers in the coming sessions. Support for HO looks to be at the 3.15, then a 3.05 level.

Daily Heating Oil Chart

Heat map

MAY 31833 +.0276
JUN 31328 +.0137
JUL 30852 +.0066
AUG 30435 +.0028
SEPT 30043 +.0004
OCT 28602 -.0006
MAY 31944 +.0333
JUN 31984 +.0315
JUL 31982 +.0292
AUG 31985 +.0269
SEPT 32006 +.0259
OCT 32038 +.0245
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Topics: Commodities, Jobless claims rise, Jobless numbers, CRUDE

RBOB Continues Plunge as HEAT Stalls

Posted by Mark Pszeniczny on Apr 19, 2012 5:16:00 PM

Gasoline futures continued to sell off today after starting the early morning in the green. RBOB was up as much as 2 cents prior to the opening bell on news of Spain having a successful bond sell off to avoid yet another European debt scare. That bullishness turned however as Germany was said to be at odds with other Nations on how to proceed with the European Zone bailout plan. Simultaneously, Moodys was said to be ready to announce a downgrade of France's debt rating that caused the US dollar to push higher. A higher Dollar generally has a negative affect ( or positive affect from some viewpoints) on Commodities. Crude looks to be poised to fall below $100 for some time, getting as low as $101.67 before closing at $102.27, down .40. NatGas inventories were in line with estimates and on a whole remain roughly 700 bcf higher than the 5 year average. Even with the sessions slight bump in HO, finishing up .0069 to $3.1251, we are still roughly .15 less than two weeks ago. RBOB continues to be the dog falling another .0486(almost .25 in two weeks) to $3.1541. While it is nice to see the prices fall, realistically most think another .25 needs to be pulled off to get back to a "normal" state.


Daily Heat Chart

Heat map

MAY 31541 -.0486
JUN 31158 -.0331
JUL 30758 -.0220
AUG 30367 -.0176
SEPT 29974 -.0152
OCT 28550 -.0110
MAY 31251 +.0069
JUN 31284 +.0065
JUL 31320 +.0060
AUG 31353 +.0053
SEPT 31388 +.0048
OCT 31445 +.0039
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Topics: Commodities, Spanish Bonds, CRUDE, Dollar Strengthens

NYMEX Surges with Better Than Expected Growth

Posted by Mark Pszeniczny on Apr 2, 2012 4:35:00 PM

You hear us talk about it all the time. Expectations. What do a certain group of people expect to happen or be reported versus what is in fact reality. In a world economy that has taken one hit after another, when "reality" exceeds expectations, it is cause for celebration. In our case, speculation. Todays wild reversal was primarily due to the Purchasing Managers Index, PMI. This benchmark is used by many economist to gauge growth and or contraction. And just like any report, pundits put their spin on what is to be expected. Today showed that the US economy grew at a more robust rate in March than was to be expected, and at a higher rate than February. This caused many who got out of positions last week, to load the back up this today. Even more wild was that the markets were down over .02 early in the session. By the time the closing bell rang, a weeks worth of losses were wiped away with RBOB surging .0741 to $3.3822, HEAT adding .0795 to $3.296 and Crude tacking on $2.21 to $105.23. With a short week on tap due to Good Friday and another set of Job data due out Wednesday, investors were not willing to let the buying opportunity pass. Again, the overall theory being that a growing economy can continue to support higher fuel prices. I tend to believe history on this topic rather than investors.

heat map

MAY 33822 +.0741
JUN 33137 +.0644
JUL 32554 +.0607
AUG 32010 +.0619
SEPT 31472 +.0648
OCT 29878 +.0668
MAY 32496 +.0795
JUN 32562 +.0768
JUL 32634 +.0743
AUG 32712 +.0731
SEPT 32781 +.0728
OCT 32835 +.0728
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Topics: RBOB, PMI

Futures Continue to Rise as All Eyes on Iran

Posted by Mark Pszeniczny on Feb 22, 2012 3:59:00 PM

It seems like we have been repeating the same mantra for a month, " we appear to be at the high end of the range".... Unfortunately we haven't moved any lower. Since the begriming of the month we have seen roughly 20 cents gets tacked on to HO ( as shown below) . Presently we are at 18 month highs for the Heating Oil pit. Early in todays session it appeared we were going to have a healthy correction as both pits were off roughly 2 cents on news of lagging manufacturing rates. That sell off gave way to a buying spree as more and more people put Greece on the back stove and gave credence to Iranian threats. Iranian ministers again today announced it would not idly sit by if provoked by another country. This comes on the heels of yesterdays announcement that it would take "preemptive measures" if provoked by sanctions. The nation has already cut supplies to the European zone that continues to be mired in a deep freeze. There is no doubt that we have a problem in Iran, the key will be how the White House chooses to deal with it. Domestically, as gas prices continue to rise, the self fulfilling prophecy has taken hold over news outlets predicting $5 gas by Memorial Day. All in all, there is very little in the way of bearish data or news to push the trade down and as historically happens, demand destruction will be a deciding factor for lower prices. At the close, Crude rose 3 cents to $106.28, RBOB tacked on .0175 to $3.0877 and HEAT gained another .0331 to $3.2724.
heat map
MAR 30877 +.0175
APR 32630 +.0145
MAY 32536 +.0151
JUN 32249 +.0160
JUL 31842 +.0158
AUG 31372 +.0150
MAR 32724 +.0331
APR 32650 +.0302
MAY 32509 +.0271
JUN 32417 +.0250
JUL 32429 +.0232
AUG 32445 +.0211
Read More

Topics: Iran, European Economy, $5 Gas

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