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

Dollar Surges, Nymex and DOW plummet

Posted by Mark Pszeniczny on Aug 4, 2011 5:17:00 PM

The trend is definitely your friend!  As bearish tones continue to make tsunami like waves throughout the market, commodities took a beating along with the entire equity complex today.  The DOW fell a massive 3% on continued fears of a weaker than expected US economic picture.  The dollar soared higher today against the foreign basket as the European Central Bank bought bonds in an attempt to ward of a debt crisis taking over the region.  A weaker jobs outlook also played heavily into the mentality of traders today that had most running to book profits as quick a they could.  As fears of the dreaded double dip recession continue to make their way to the front page, Markets across all lines have taken huge hits.  I must say, from an end user perspective, this is OK.  The major hurdle for the Country to leap over  and to finally overcome the recession has been higher fuel prices.  Without a less expensive way for Americans to go from place to place, ship goods,  heat their homes, etc. etc. ,it is impossible to even think to believe we are in a better place.  It all starts with lower fuel pricing.  The key now is for these levels to maintain for a reasonable amount of time, if not fall further.  Demand will be a central player in the equation "where do we go from here" .  At the close, Crude fell $5.30 to $86.63, HEAT dropped .1250 to $2.8939 and RBOB lost a staggering .1941 to $2.7372.  Expect to see a buy back on Friday with Monday's action setting the tone for the remainder of the summer.

heat chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
SEP    27372       -.1941
OCT    26288      -.1763
NOV    26120      -.1659
DEC   26049       -.1605
JAN    26100       -.1593
FEB    26239      -.1587
HEAT CLOSE
          CLOSE    CHANGE
SEP    28939     -.1250
OCT   29048      -.1270
NOV    29169      -.1293
DEC   29293      -.1308
JAN   29416       -.1319
FEB   29424       -.1324
Read More

Topics: Weak Jobs Report, Double Dip Recession, Dow falls 3%, S&P Downgrade, Dollar Strengthens

Futures Dip as GDP Report Shows Flat Economy

Posted by Mark Pszeniczny on Jul 29, 2011 5:12:00 PM

Last week we mentioned that it was going to be a sloppy back and forth week if a debt ceiling resolution was not passed.  As shown below, that was exactly what materialized.  Starting the week, HEAT was at 3.1280 and finished today at 3.0962 with all sorts of gyrations in between.  As traders are not willing to commit either way as a resolution  still looms and a tropical storm hitting the gulf region, it was somewhat surprising to see the market fall off as much as it did mid session.  Both products were down as much as 4 cents on the heals of GDP data being released which showed the economy was basically flat.  Furthermore, it notes that the recession  was deeper than first thought and the economy is obviously growing at a much slower rate.  There is growing sentiment that we will begin to encounter demand destruction at a growing rate if prices do not ease relatively quickly. At the close Crude fell $1.74 to $95.70, RBOB lost .0047 to $3.1129 and HEAT fell .0090 to $3.0962. This weekend will be critical as to how the Markets will shake out for the next few months, as a resolution should see lower prices

heat chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
AUG    31129       -.0047
SEP    30579      -.0059
OCT    29211     -.0129
NOV   28852       -.0148
DEC    28691       -.0152
JAN    28708      -.0153
HEAT CLOSE
          CLOSE    CHANGE
AUG  30962     -.0090
SEP   30994       -.0150
OCT    31130      -.0156
NOV   31282      -.0169
DEC   31429       -.0176
JAN   31570       -.0183
Read More

Topics: GDP, Debt Ceiling Resolution, RBOB tumbles, CRUDE falls

Crude Rises as Products Fade in Late Sell Off

Posted by Mark Pszeniczny on Jul 21, 2011 9:03:00 PM

Crude once again danced above the $100 a barrel mark today as many speculated that the economy is showing signs of improving.  Furthermore a marathon meeting session on Greece of European Leaders ended with a consensus that they will throw more money into the debt strapped country.  The Euro rose on the news as the dollar fell, thus pushing money into Crude.  The products failed to follow the rally.  RBOB slipped .0475 to $3.0995 while HEAT lost .0192 to $3.0992.  All while Crude managed to gain .73 to close at $99.13, more than a full buck off its high of $100.16.  Holding down products appear to be the fact that demand is still soft, and retail gas stations are still in the high $3 range.  Additionally, our friends at the IEA stated that they are willing to release more product to the market to stave off any spike in futures.  HEAT remains in a congested selling pattern and looking back over the last few months, you have seen healthy corrections after these periods.  In laymen terms, nobody is willing to make a move either way until an event pushes us too.  This event will likely be in the form of how the US debt ceiling issue is resolved, meaning we probably have another week of sloppy back and forth days

heat chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
AUG    30995       -.0475
SEP    30567      -.0379
OCT    29285     -.0277
NOV   28959       -.0235
DEC    28801       -.0215
JAN    28832      -.0200
HEAT CLOSE
          CLOSE    CHANGE
AUG  30992     -.0192
SEP   31129       -.0191
OCT    31273      -.0188
NOV   31437       -.0191
DEC   31600       -.0191
JAN   31753       -.0190
Read More

Topics: Greece Bailout, Dollar falls, government shutdown, CRUDE

Futures shed value, outpaced by Crude

Posted by Mark Pszeniczny on Jul 11, 2011 6:14:00 PM

Crude values have tumbled over the last two sessions outpacing the products which has many Americans wondering why.  Crude fell another $1.05 today to close at $95.15 while HEAT managed to lose only 89pts to $3.0875 and RBOB dropped .0221 to $3.0705. HEAT actually traded positive briefly with about 20 minutes lef tin the session.  The complex as a whole opened up with strong losses across the board as China released reports that inflation has hit a 3 year high, while seeing Crude imports drop 6%, thus sending the dollar higher.  As Friday's news lingered this morning of a mere 18k jobs being added last month, the lowest in over 9 months, and the apparent stalemate with the debt reduction resolutions, many were taking profits.  Should be of no surprise that many market managers added length in the last week according to the most recent CFTC report.  The common theme is that once again we are in an overbought market with a very wide range.  That range for HEAT has been from 2.80 to 3.35.  The complex has been unwilling to breakout in either direction, primarily based on fear of the unknown.  Once again, an event will need to happen to have it break through the high or fall below the low.   
heat chart
RBOB CLOSE
                 CLOSE       CHANGE 
  
AUG     30705       -.0221
SEP    30249     -.0282
OCT    28915      -.0310
NOV    28561       -.0321
DEC     28446      -.0297
JAN    28506      -.0269
HEAT CLOSE
          CLOSE    CHANGE
AUG    30875       -.0089
SEP    30982      -.0099
OCT    31106     -.0111
NOV   31262     -.0119
DEC   31416     -.0129
JAN   31560      -.0141
Read More

Topics: Jobless numbers, CRUDE

NYMEX jumps as Greece Debt vote Looms

Posted by Mark Pszeniczny on Jun 28, 2011 5:57:00 PM

Investors went on the attack today after several sessions of healthy losses and viewed current values as buying opportunities.  As a vote looms on the Greece debt crisis, most are now expecting the Nation will accept the austerity package as stave off pending doom.  As the dollar felt the brunt of this news, NYMEX values skyrocketed in early morning trading.  Yet, citizens of Greece still found the time and energy to riot in the streets.  Interesting news in the US  as Home prices were up slightly for the first time in over 8 months, signally to some a momentum shift in the economy.  Of course, those same speculators disregarded a report that shows consumer confidence dipping yet again.  With Crude inventories expected to fall slightly on Wednesday and the products expected to build, along with the official start of the summer driving season hitting this week, we are lining up for an exciting Wednesday in the Industry.  I would like to believe that cooler heads prevail and we continue our march down.  Remember, one day does not make a trend and the trend is your friend.  At the close, Crude added $2.28 to end at $92.89, HEAT jumped .0608 to 2.8257 and RBOB led the charge gaining .0821 to $2.8896.
 
heat chart
RBOB CLOSE
                 CLOSE       CHANGE 
  
JUL     28896       +.0821
AUG    28156      +.0712
SEP    27886         +.0683
OCT    26787       +.0662
NOV     26583      + .0642
DEC    26505      +.0622
HEAT CLOSE
          CLOSE    CHANGE
JUL    28257       +.0608
AUG    28415      +.0601
SEP    28609     +.0599
OCT   28814      +.0602
NOV   29018       +.0602
DEC   29214       +.0602
Read More

Topics: Greece Bailout

Market Tumbling Update

Posted by Mark Pszeniczny on Jun 23, 2011 12:42:00 PM

The International Energy Agency said it will release 60 million barrels of oil from emergency stocks in the next 30 days to alleviate supply problems caused by the shutdown of Libyan crude exports due to the civil war.

 

The IEA, which represents major energy-consuming nations, said the tight supply situation was becoming a threat to a fragile global economic recovery. "I expect this action will contribute to well-supplied markets and to ensuring a soft landing for the world economy," IEA chief Nobuo Tanaka said.

 

The U.S. Department of Energy said it would release 30 million barrels a day as its contribution toward the measure.

 

The unexpected announcement drove crude-oil futures lower, with the Nymex contract for August delivery down 4.5% to $91.13 a barrel.

Read More

Topics: Libya, IAE

Greece Debt Crisis pushes Nymex Lower

Posted by Mark Pszeniczny on Jun 20, 2011 7:31:00 PM

For the fourth straight day values across the most of the complex have fallen.  This mornings early action was surrounded by ongoing debt concerns in Greece, who announced they needed an immediate $17 billion....yes, billion... dollar infusion in order to meet creditors.  As a result the Euro plummeted and the dollar soared, which pulled money out of commodities.  Many feel that downside may be limited as ongoing concerns of supply disruptions continue and we are knocking on hurricane season.  What is interesting to note about todays session was that Crude actually finished higher by.25 to close at $93.26.  Still Crude values seem low for products being so high.  HEAT fell .0573 to 2.9329 and RBOB lost .0345 to 2.9115.  Or, the products are overpriced for Crude values.  I tend to think the latter scenario is more fitting.  As you may recall it wasn't to long ago that HO was at the 2.80 level.  With todays finish, we continue to be on the back nine of the recent range and would not put it out of the realm of possibility to touch 2.80 in the near future.
Daily Heat Chart
heat chart
RBOB CLOSE
                 CLOSE       CHANGE 
  
JUL     29115       -.0345
AUG    28526      -.0368
SEP    28324     -.0375
OCT    27165       -.0357
NOV     26953       -.0351
DEC    26848      -.0341
HEAT CLOSE
          CLOSE    CHANGE
JUL    29320       -.0513
AUG    29469      -.0509
SEP    29655     -.0502
OCT   29843      -.0495
NOV   30031       -.0490
DEC   30202       -.0481
Read More

Topics: Greece Bailout, Dollar Strengthens

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