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

Massive Crude Draw Overshadowed by MOC news

Posted by Mark Pszeniczny on Sep 21, 2011 8:15:00 PM

Another fantastic sell off ahead of the close as much of the day saw values higher on the heels of a massive 7.3 mbl draw in crude stocks.  Distillates added 800k bls while gasolines built by 3.3 mbl.  The Crude numbers were in stark contrast of last nights API report of a roughly 2 mbl build.   The news at 10:30 sent the pits higher as HEAT at one point trader over four cents higher.  As the day wore on and more and more angst on the upcoming FED announcement, values danced around the even mark until right before the close.  The FED announced that they would sell $400 billion in short term assets, buying back longer term securities.  The move is an effort to keep mortgage and interest rates at "uber-low" levels for the extended future.  Apparently this time around the mood is for Commodities to sell off on such news.  Additional bearish tones overpowered the reports of the European Union joining the US in a long standing  Oil import sanction against Syria.  The key is that the sour product rarely sees its way to the US, and should have zero impact on imports. The gesture is yet another measure designed to reshape the Mid East as unrest continues topple regimes.  At the close, Crude fell $1.00 to $85.92, RBOB slipped .0349 to $2.6665 and HEAT fell .0274 to $2.9342.
heat map
RBOB CLOSE
                 CLOSE       CHANGE 
  
OCT    26665       -.0349
NOV    26564      -.0279
DEC    26432      -.0264
JAN   26412        -.0267
FEB    26474        -.0274
MAR    26574      -.0281
HEAT CLOSE
          CLOSE    CHANGE
OCT    29342    -.0274
NOV   29452    -.0261
DEC   29533      -.0253
JAN   29608     -.0246
FEB   29573      -.0236
MAR   29448      -.0225
Read More

Topics: FED holds interest rates, Crude draws

NYMEX dips ahead of Presidential Speech, DOE's Mixed

Posted by Mark Pszeniczny on Sep 8, 2011 9:24:00 PM

Although the market finished down, it was not until very late in the session that we felt somewhat comfortable that it was a certainty.  Early morning jobs data reported yet another increase in unemployment claims, up 2k to 414k, Commodities fought their way back into positive ground as investors rushed for a safe haven.  The new information will be a key tenet for tonights Presidential address on the state of the economy, which could shift the markets in either direction.  The White House is expected to announce yet another round of stimulus spending, roughly $300 billion, on infrastructure and tax cuts.  Additionally, reports of the European Central Bank reporting what they perceive as "significant downside risk" to the European Economy.  With the mixed DOE report of Crude losing 4mbl and Gas and Distillates adding 198k and 708k respectively, while surprising , kept any major losses in check.  I would expect next weeks numbers to have the full impact of the past weeks weather, specifically in the Northeast.  It has become increasingly more difficult to determine how news will be perceived in the eyes of  market participants, what was once a bullish news day has now turned to a cautiously bearish one.  At the close, Crude slipped .29 to $89.05, RBOB lost .0228 to $2.8852 and HEAT lost .0313 to $3.0443.

heat map

RBOB CLOSE
                 CLOSE       CHANGE 
  
OCT    28852       -.0228
NOV    28351      -.0255
DEC    28044      -.0273
JAN   27976        -.0290
FEB    28020        -.0296
MAR    28099      -.0297
HEAT CLOSE
          CLOSE    CHANGE
OCT    30443    -.0313
NOV   30526     -.0330
DEC   30603      -.0344
JAN   30689     -.0358
FEB   30646      -.0363
MAR   30515      -.0363
Read More

Topics: European Economy, President Obama Address, Jobless claims rise

Futures relatively stable as storms pop up

Posted by Mark Pszeniczny on Sep 1, 2011 9:17:00 PM

It is scary to think that a four cent swing in gas futures can be termed as "relatively stable".  A somewhat surprising storm popped up in the Gulf of Mexico region this morning that caused the evacuations of most platforms in the area and had many investors buying up the storm premium ahead of the long weekend.  Both products early in the morning were trading down almost 3 cents and only HO was able to remain in the red.  Also churning out in the Atlantic is presently a CAT 3 hurricane Katia, expected to hit the east coast again sometime late next week.  This, on the heels of many East Coast terminals just now coming back on line after Irene.  Expect to see some wild cash moves in the harbor.  As mentioned, RBOB was able to gain .0164 to settle at $2.8927, surprising given the current product situation in the northeast and expected storms.  HEAT fell .0322 to $3.0518, most of which came in the last 20 minutes of the session while WTI added a mere 12 cents to $88.93.  How much of the day is due to the seasonal product switch and cleansing of books will play out on Friday. Other news has unemployment figures to be flat for August, and have European manufacturing rates sliding, both kept the pits in check most of the day.  Looking back on August,  HO started the month off at 3.1360 and closed at 3.084, but after hitting a low 2.70, once again proving that historically it is the most volatile trading months, relatively speaking of course

Heat map

RBOB CLOSE
                 CLOSE       CHANGE 
  
OCT    28927       +.0164
NOV    28372      +.0083
DEC    28060      +.0011
JAN   27986        -.0017
FEB    28019        -.0033
MAR    28081      -.0040
HEAT CLOSE
          CLOSE    CHANGE
OCT    30518    -.0322
NOV   30608     -.0296
DEC   30693      -.0270
JAN   30784     -.0246
FEB   30743      -.0228
MAR   30611      -.0218
Read More

Topics: European Mfg Down, Unemployment Flat

Futures end mix as FED disappoints, Irene lurks

Posted by Mark Pszeniczny on Aug 26, 2011 3:53:00 PM

On Wednesday we suggested that todays market could be volatile as many investors were eagerly anticipating the FED chairman speech.  The consensus was that new measures would be put in place to spur growth.  It became clear early in the session that this was not going to happen and all pits sold off quickly and RBOB dropped as much as five cents.  Not to be outdone Crude was down over $2 as well.   However, as GDP numbers were released, the pits clawed their way back into positive ground.  GDP grew by only 1% for the second quarter, less than the expected 1.3%,  As the day wore on, pricing did not move all that much as it appeared many may have gotten out of Dodge ahead of Irene.  Currently it appears that the storm will hit the Northeast sometime Sunday as a hurricane and move rapidly through the Northeast over the course of the day, of course making a stop in Wilbraham, Ma.  With high winds and heavy flooding, power outages are expected.  Fear not folks, DKB world headquarters will be staffed and ready to assist.  At the close, Crude added.07 to $85.37, HEAT gained .0246 to $3.0101 and RBOB fell .0333 to $2.9346, while OCT RBOB only lost .0157.  Stay safe.

Heat map

RBOB CLOSE
                 CLOSE       CHANGE 
  
SEP    29346       -.0333
OCT    27860     -.0157
NOV    27358     -.0071
DEC   27141       -.0019
JAN    27120       -.0012
FEB    27191      -.0004
HEAT CLOSE
          CLOSE    CHANGE
SEP    30101    +.0246
OCT   30158     +.0226
NOV    30211      +.0220
DEC   30264     +.0216
JAN   30319      +.0205
FEB   30262      +.0189
Read More

Topics: Hurricane Irene, Bernanke

NYMEX sways with data and storm

Posted by Mark Pszeniczny on Aug 24, 2011 5:24:00 PM

A slew of data today had Futures up strong for much of the day while gasoline danced around the flat area as it decided how to digest all the news.  First and foremost, any hurricane premium added to the market kept prices lower as Irene appears to be slicing it's way towards New England.  Good for the Oil industry, not so good for our neck of the woods.  Landfall is now expected to be Sunday night or Monday morning with potential of a CAT 3 hurricane.  Inventories released today where also actually slightly bearish as compared to API's last night.  The Crude draw of 2.2 mbls was substantially less than the 5 mbl draw reported last night.  Gasoline and distillates also added 1.7mbl and 1.4mbl respectively.  As reports of Junes durable goods orders being a modest 4% increase hit the wires, a fresh round of buying hit the pits as this is a good sign of an improving economy, but muting that news was a weakening housing report that showed values dropping yet again.  All eyes will now be on Friday as the FED is expected to speak again.  At the close, Crude actually lost .28 to $85.16 while RBOB added a mere .0018 to $2.8784 and HEAT gained .0182 to $2.9607.
heat map
RBOB CLOSE
                 CLOSE       CHANGE 
  
SEP    27884       +.0018
OCT    27558     +.0086
NOV    27118     +.0113
DEC   26902       +.0121
JAN    26907       +.0129
FEB    27008      +.0133
HEAT CLOSE
          CLOSE    CHANGE
SEP    29607    +.0182
OCT   29690     +.0198
NOV    29761      +.0202
DEC   29825     +.0207
JAN   29901       +.0216
FEB   29876       +.0218
Read More

Topics: Hurricane Irene, API report, Futures Soar

Futures Plunge as Data shows Economy Soft

Posted by Mark Pszeniczny on Aug 18, 2011 9:37:00 PM

I feel like I have said this before, but what a difference a day makes!  With yesterday market making its own reality, today i would say it got kicked in the pants BY reality.   Futures started the session down hard and sold off heavily as a string of bearish data got reported.  First was the July Home sales report that showed sales fell by roughly 3.5%, second was the jobless report for last week which increased by 9000 new claims.  Generally not a good sign with an already weak economy.  Lastly, Morgan Stanley downgraded their outlook for the remainder of the year, and within the report noted that it was cutting GDP estimates by roughly .3%.  So what does all this mean?  "There is Gold in them there hills"...  Generally, news like this would push Commodities higher as equities would absorb the brunt of the sell off, but with values of Crude and products perceived to be overpriced, the selling carried over to the NYMEX.  Keep in mind what we mentioned a few weeks ago,  in order for things to start to improve, it has to start with cheaper fuel prices.  Where that level is, only time will tell.  At the close, Crude fell$5.20 to $82.38, RBOB lost .0871 to $2.7832 and HEAT shed .0868 to $2.8748

heat map

RBOB CLOSE
                 CLOSE       CHANGE 
  
SEP    27832       -.0871
OCT    26652      -.0750
NOV    26299      -.0770
DEC   26131       -.0784
JAN    26146       -.0791
FEB    26256      -.0795
HEAT CLOSE
          CLOSE    CHANGE
SEP    28748    -.0868
OCT   28836     -.0870
NOV    28948      -.0864
DEC   29049     -.0859
JAN   29153       -.0857
FEB   29149       -.0854
Read More

Topics: Commodities, GDP, New Normal, Jobless numbers

Flat Demand and Gasoline draw push NYMEX

Posted by Mark Pszeniczny on Aug 17, 2011 5:12:00 AM

When the always suspect API's were released last night at around 4:30pm,  I couldn't contain myself when I saw the massive 5.2mbl draw announced for gasolines.  By in large, estimates were that we were only to expect a 1.2mbl draw down in stocks.  Obviously overnight markets reacted strongly to the pending news pumping up values almost .06 on all products ahead of the 10:30 announcement of today's DOE numbers.  And to much of my chagrin,  the inventory report confirmed the API gasoline read as a 3.5mbl draw was announced in gasolines.  Yet Crude showed a large 4.2mbl build vs estimates of a 500k draw and distillates grew by 2.5mbl while expectations were for only a 500k barrel increase.  While the draw in gas can be explained by a seasonal switch over, on relatively flat demand, it is difficult to explain away the builds in Crude and distillates.  Unfortunately the Market has a way of making its own reality and could never gather enough momentum to sell off hard enough to turn negative today.  Values still appear to be on the high end of the range as the HEAT low of 2.70 a few weeks ago may have been the seasonal low.  We have now added about 20 cents in value over the last five sessions.  At the close, WTI Crude rose .93 to $87.58, RBOB added .0165 to $2.8703 as outer months were about two cents stronger, and HEAT jumped .0290 to $2.9616.
heat map
RBOB CLOSE
                 CLOSE       CHANGE 
  
SEP    28703       +.0165
OCT    27402      +.0386
NOV    27069      +.0409
DEC   26915       +.0411
JAN    26937       +.0407
FEB    27051      +.0400
HEAT CLOSE
          CLOSE    CHANGE
SEP    29616     +0290
OCT   29706      +.0285
NOV    29812      +.0284
DEC   29908     +.0281
JAN   30010       +.0281
FEB   29906       +.0280
Read More

Topics: S&P Downgrade, Dollar Strengthens, Expected Draws in Crude and Gas

NYMEX rebounds with Bullish Inventories

Posted by Mark Pszeniczny on Aug 10, 2011 5:39:00 PM

We continue the "new normal" roller coaster ride as NYMEX values once again turn sharply positive on the the heels of a very bullish Inventory report.  Not helping the cause was the FED announcing yesterday that they will hold rates very low for the next two years.  It was the first such comment that actually put a timeline on Interest rates.  Furthermore, the comments are a complete 180 degree turn in approach from the usually vague board.  With the greenback being pushed lower, Commodities surged higher beginning just after yesterdays close.  DOE numbers showed a staggering 5.2mbl draw in Crude, while most expected a 1.7mbl build.  Gas fell 1.6mbl vs a 700k expected build and distillates drew 737k while analysts expected a build of 1.25mbls.  All this while the DOW continues its own seesaw as our 401k's become 201e's!  Currently down over 300 points, the EIA just recently reported that it sees "significant downside risk" should current financial market concerns become more widespread.  Either way, we are above that magical $2.80 number again on HEAT as it closed up .1005 to $2.8653, RBOB gained .1149 to $2.7825 and CRUDE added $3.59 to $82.89. 
 
heat chart
RBOB CLOSE
                 CLOSE       CHANGE 
  
SEP    27825       +.1149
OCT    26312      +.1104
NOV    26022      +.1074
DEC   25902       +.1046
JAN    25946       +.1043
FEB    26076      +.1038
 
HEAT CLOSE
          CLOSE    CHANGE
SEP    28653     +.1005
OCT   28751      +.0988
NOV    28863      +.0960
DEC   28970     +.0933
JAN   29083       +.0909
FEB   29079       +.0886
Read More

Topics: Commodities, EIA, Bernanke, Dollar falls, S&P Downgrade, Inventory Draws, Crude draws

It's Deja Vu All Over Again - Commodities React to Downgrade

Posted by Mark Pszeniczny on Aug 8, 2011 5:23:00 PM

The levee broke once again as world markets reacted to S&P's decision to downgrade the US credit rating.  Commodities opened down over 7 cents on Sunday night and didn't look back.  Trading in negative territory all day and then banging the close with about 20 minutes left in the session.  HEAT fell as much as .1530 before clawing its way back to finish down .14 to 2.8017.  RBOB  coincidentally, was holding up for much of the day as it languished down around 4 cents before falling .1136 to $2.6916.   WTI  fell  a staggering $5.57 to $81.31.  The devil is in the details though, the 2.80 level on HEAT, while breached, held for the close, same can be said for the $80 mark on WTI.  Look for a buy back on Tuesday with further downside to come the remainder of the week as money continues to get pulled out of commodities.

heat chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
SEP    26916       -.1136
OCT    25515      -.1353
NOV    25265      -.1399
DEC   25154       -.1413
JAN    25195       -.1422
FEB    25330      -.1425
HEAT CLOSE
          CLOSE    CHANGE
SEP    28017     -.1400
OCT   28114      -.1399
NOV    28241      -.1390
DEC   28365     -.1384
JAN   28498       -.1374
FEB   28509       -.1366
Read More

Topics: Commodities, US Credit Rating, S&P Downgrade

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