NYMEX continues higher ahead of DOE data

Posted by Mark Pszeniczny on Feb 7, 2012 5:40:00 PM

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?

Continuation crude chart, continuation heating oil chart, RBOB continuation chart, continuation natural gas chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
MAR    29275      -.0004
APR    30674      +.0000
MAY   30572     -.0002
JUN     30296       +.0002
JUL     29951       +.0009
AUG    29590       +.0014
HEAT CLOSE
          CLOSE    CHANGE
MAR    31909      +.0343
APR     31595      +.0342
MAY    31294      +.0318
JUN    31080      +.0288
JUL     31017     +.0268
AUG     31014      +.0246
Read More

Topics: Iran, European Economy, CRUDE

FOMC Stance pushes Commodities Higher

Posted by Mark Pszeniczny on Jan 26, 2012 4:27:00 PM

Late yesterday we saw the overnight pits shoot higher once news surfaced that the FED was of the position to keep fund rate very low through the foreseeable future.  Citing continued slow economic growth, a European debt crisis, (that I recently read to be compare to "a pimple on a teenage boy") and a persistent unemployment rate that is still around 8.5%, the FED is still considering another round of quantitative easing later this winter.  Commodities have responded positively as the greenback fell to a six week low early this morning.  Still positive signs of an improving economy are are out there as durable good orders for December showed a 3% increase which unfortunately has a bullish effective on Futures.  The range for Heat has not broke and we continue to see sideways action as shown in the chart below.  At the end of the day, Crude added .30 to $99.70, RBOB gained .0128 to $2.8466 and HEAT jumped .0343 to $3.0535.

heat chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
FEB    28466       +.0128
MAR   28508      +.0134
APR    29794      +.0165
MAY   29664       +.0173
JUN   29368       +.0167
JUL    29008       +.0167
HEAT CLOSE
          CLOSE    CHANGE
FEB     30535     +.0343
MAR    30446      +.0342
APR     30244      +.0318
MAY   30043      +.0288
JUN    29911     +.0268
JUL     29899      +.0246
Read More

Topics: Commodities, European Economy, FED holds interest rates, FED rates

Late Rally pushed Futures higher ahead of the Close

Posted by Mark Pszeniczny on Jan 24, 2012 4:20:00 PM

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.heat map
RBOB CLOSE
                 CLOSE       CHANGE 
  
FEB    28050       +.0271
MAR   28105      +.0249
APR    29399      +.0161
MAY   29264      +.0118
JUN   28979      +.0091
JUL    28633      +.0081
HEAT CLOSE
          CLOSE    CHANGE
FEB     30242     +.0144
MAR    30151      +.0116
APR     29951      +.0073
MAY   29741      +.0051
JUN    29611     +.0022
JUL     29612      +.0000
Read More

Topics: Iran, Straits of Hormuz, Futures

NYMEX Stumbles with Stonger Dollar

Posted by Mark Pszeniczny on Jan 20, 2012 4:33:00 PM

Fears of yet another Greece loan default were on the minds of many investors today as futures showed moderate losses as the dollar strengthened.  Greece is hoping that banks will forgive roughly $130 billion in debt due in the next few months.  If only my bank would forgive half of my mortgage, I would be a happy man!  Positive news from the housing industry was reported as existing home sales increased 5% in December.  The market couldn't rally enough today and with gasoline demand falling over 6% in a month on month comparison, the threat of demand destruction in a slightly improving economy is a real concern.  It is hard to believe that we have seen six down days in the last seven sessions in the Heat pit.  We have peeled off almost 10 cents during that time frame.  This following our prediction that once we touch 3.10ish we should pull back.  As this has been the pattern for the year.  Looming over the weekend is a European vote on accepting Iranian oil, as reports of US ships moving out of the region.  As a quick snow event moves through the region this weekend, lets all remember to keep those fills clear and accessible.  Crude fell $1.93 to $98.46, RBOB lost .0310 and HEAT lost .0476 to $2.9884.

heat chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
FEB    27844       -.0314
MAR   27903      -.0325
APR    29242      -.0293
MAY   29128      -.0295
JUN   28843      -.0297
JUL    28490      -.0303
HEAT CLOSE
          CLOSE    CHANGE
FEB     29884     -.0476
MAR    29848      -.0487
APR     29720      -.0475
MAY   29550      -.0469
JUN    29460     -.0469
JUL     29485      -.0462
Read More

Topics: European Economy, Iran Sanctions, Greece Bailout

RBOB surges, HEAT ends lower

Posted by Mark Pszeniczny on Jan 18, 2012 4:40:00 PM

Early morning news of Hess shutting down its St. Croix facility from producing gas to strictly an oil storage facility sent RBOB futures higher some seven cents before the opening bell even rang.  Fear of tightening eastcoast gasoline supplies could not have hit at a worst time as ongoing tensions with Iran have again made headlines.  Iran appears to have got the eye, or wallet, the Saudis as they have gestured they are unwilling to pick up additional pumping left by removing Iranian barrels from the market place.  Realistically, this means that the Kingdom is comfortable with Crude above $100.  The trade seemed to cool off as the day moved on with large builds expected across all products in the delayed DOE report.  Additionally, looming concerns over the long term demand continue to be a bearish influence on any price breakouts beyond our current range.  At the Close, Crude fell 12 cents to finish at $100.59, RBOB surged .0541 to $2.8254 and Heat fell .0238 to $3.0134.

heat map

RBOB CLOSE
                 CLOSE       CHANGE 
  
FEB    28254       +.0541
MAR   28292      +.0496
APR    29480      +.0391
MAY   29340      +.0319
JUN   29053      +.0245
JUL    28713      +.0195

HEAT CLOSE
          CLOSE    CHANGE
FEB     30134     -.0238
MAR    30112      -.0223
APR     29995      -.0233
MAY   29859      -.0235
JUN    29808     -.0231
JUL     29850      -.0244
Read More

Topics: St Croix, Hess, HEAT, RBOB

Late session sell off pushes Futues into the Red

Posted by Mark Pszeniczny on Jan 11, 2012 4:44:00 PM

Overnight action saw pits slightly higher as the market weighed the continued threat of Nigerian oil workers to join the General Strike that has paralyzed the Nation for the last several days.  Prior to the release of inventories, which many were still digesting the much less bearish EIA numbers from Tuesday night, the housing market got a boost with a report showing applications for homes were up 4.5% this period.  A bullish indicator for the economy in general. This kept the market trading on both sides of 0.00 much of the morning.  With the large builds across the board on the DOE report, the initial sell off fizzled away as the day wore on.  Again, only to late session heroics, as in the last 15 minutes pushed HO down .0368 to 3.0646, RBOB slipped .0095 to 2.7633 and Crude fell 1.37 to $100.87.  Adding to my notes yesterday, many commented on the disbelief of how range bound the Heat pit has been this year.  Below is an eight month snap shot and shows the caterpillar like chart.  A solidly defined range of 2.70 to 3.15.  Currently sitting at 3.06, lets hope that this pattern continues.

DAILY HEATING OIL CHART

daily heating chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
FEB    27633       -.0095
MAR   27703      -.0089
APR    28954      -.0088
MAY   28905      -.0088
JUN   28706       -.0086
JUL    28442      -.0083

HEAT CLOSE
          CLOSE    CHANGE
FEB     30646     -.0368
MAR    30593      -.0346
APR     30409      -.0337
MAY   30195      -.0329
JUN    30090     -.0301
JUL     30090      -.0285
Read More

Topics: EIA, Nigerian Oil Strike, DOE

Futures Slip with Mixed Inventory Report

Posted by Mark Pszeniczny on Oct 26, 2011 8:26:00 PM

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
Read More

Topics: Commodities, European Economy, Greece Bailout, Bull Market, CRUDE

NYMEX Remains Volatile with Ghadaffi Death

Posted by Mark Pszeniczny on Oct 20, 2011 8:34:00 PM

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
Read More

Topics: Ghaddafi Dies, Ghaddafi

Values rise on sixth day on European debt news

Posted by Mark Pszeniczny on Oct 12, 2011 8:41:00 PM

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
 
Read More

Futures surge on proposed European debt plan

Posted by Mark Pszeniczny on Sep 27, 2011 3:26:00 PM

You know the Market is searching for direction when values and sentiment shift on an unofficial report of the European debt plan.  The plan is focused on three keys tenets.  First, Greece is going to be allowed to default on 50% of their debts (must be nice, I wish i could default on 50% of my mortgage.)  Second, the size of the European debt relief fund will expand dramatically and Third, the plan will re-capitalize the European Central bank.  Based on the jump in the Dow and in Commodities, the plan is being greeted with open arms.  Coupled with the forecast of draws in inventories again this week, values started up strong and did not look back all day. Technically speaking, we have commented frequently of the 2.80 support level of HEAT. For the fourth time in a year, we have hit the 2.80 level and yet again appear to be poised to bounce off it.  At the close, Crude added $4.21 to $84.45, RBOB screamed higher by .1261 to $2.6955 and HEAT jumped .0851 to $2.8766.  Assuming we ave confirmed another short term bottom, may not be a bad time to look at layering in some sort term fixed pricing.
heat map
RBOB CLOSE
                 CLOSE       CHANGE 
  
OCT    26955       +.1261
NOV    26360      +.1076
DEC    26011      +.1003
JAN   25849        +.0936
FEB    25841        +.0888
MAR    25898      +.0860
HEAT CLOSE
          CLOSE    CHANGE
OCT    28766    +.0851
NOV   28857    +.0827
DEC   28898      +.0796
JAN   28936     +.0767
FEB   28838      +.0733
MAR   28662      +.0705
Read More

Topics: European Economy, Greece Bailout

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