Markets Jump Higher After Long Weekend

Posted by Mark Pszeniczny on May 31, 2011 5:32:00 PM

What a difference a week makes!  less than a week ago were were talking about HEAT testing some key support levels, but after today, those might be to far to see in the rear view mirror.  The pits have jumped some 20 cents in the last five sessions.  While yesterdays electronic trading seemed to bear some positive tones as most of the session was down almost 2 cents, waking up this morning saw the market up over 4 and Crude up over a dollar.  The second round of bailout money for Greece appears to be in the works as Germany is conceding. Over the weekend, a NATO commander stated his forces were making significant strides against the Gaddafi regime and guaranteed his removal in the next few months.  On the homefront, a pipeline leak in the Kansas City area that originates in Canada forced that line down for the second time in a week.  The key detail in that report is that the pipeline ends up in Cushing, Oklahoma, a key yardstick for National Inventory numbers.  The fear pushed values higher and stayed there the remainder of the day with Crude now healthily over $100 to close up $2.11 to $102.70, front month RBOB added .0584 to $3.1504, while JUL RBOB was up only .0190.  HEAT finished higher by .0658 to $3.0563, JUL HEAT added .0516 to $3.0530.   HEAT is currently at the top end of the recent range of 2.80 to 3.05,  one would expect to see some profit taking over the next couple of days.

heat chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
JUN    31504       +.0584
JUL    30503      +.0190
AUG    30186        +.0221
SEP    29903       +.0253
OCT     28612       +.0278
NOV    28311      +.0275
HEAT CLOSE
          CLOSE    CHANGE
JUN    30563       +.0658
JUL    30530      +.0516
AUG    30664      +.0511
SEP     30832      +.0506
OCT    30989       +.0503
NOV   31146       +.0500
Read More

Topics: Kansas City Pipeline, Greece Bailout, Ghaddafi

Rapture dissapoints, Commodities Tumble

Posted by Mark Pszeniczny on May 23, 2011 3:39:00 PM

Not that one has to do anything with the other, but I wonder how the market would have reacted?    Even with another volcanic eruption in Iceland (coincidentally at 6:03 EST on Saturday), the markets still opened down heavily as debt concerns loom as late Friday Greece was downgraded to junk status.  Recall the last eruption sent the European airlines, and industry as a whole into a tizzy.  But with the dollar strengthening today, oil was on the opposite side of the see saw and saw another round of healthy drops.  Disappointing manufacturing numbers also weighed in pushing both pits down well over five cents.  Somehow RBOB was able to make a move and ended up finishing positive on the day.  Which is bizarre in and of itself as a report showed that Americans drove 1.4% less than the did a year ago in March.  Some blame could be towards higher fuel prices.  You have heard me say time and again that mixed days always bring a eye of suspicion.   Although today appears to be some adjusting ahead of the long weekend as outer month RBOB was down much stronger.  At the close, Crude fell $2.40 to $97.70, RBOB rose .0023 to $2.9381 and HO tumbled .0712 to $2.8471.  The key support level for Heat appears to be firmly placed at the $2.80 market, a close below that should initiate additional downside in the coming weeks.

Daily Heat Chart
heat chart
RBOB CLOSE
                 CLOSE       CHANGE 
  
JUN    29381       +.0023
JUL    29059      -.0144
AUG    28739        -.0275
SEP    28451       -.0355
OCT     27111       -.0422
NOV    26834      -.0456
HEAT CLOSE
          CLOSE    CHANGE
JUN    28471      -.0712
JUL    28597      -.0723
AUG    28749      -.0712
SEP     28930      -.0707
OCT    29102       -.0700
NOV   29274       -.0689
Read More

Topics: Greece downgraded, Rapture, Dollar Strengthens

Markets tumble as Dollar rises and Rivers ease

Posted by Mark Pszeniczny on May 16, 2011 5:22:00 PM

Early news today had European markets standing on their head as the investors try to sort out the mess with IMF chair being arrested and how that would play into the restructuring of many foreign nations debt.  The greenback was substantially stronger this morning thus pushing commodities down.    With the pending rape charges against Dominique Strauss- Kahn, most believe this would delay or prevent the International Monetary Fund from helping countries like Greece in restructuring their massive debt.  On our own soil, the Obama Administration announced that it would extend and "ramp up" domestic production in the Gulf of Mexico and Alaska which had some significant psychological effects on trading.  As the day went on, and some disappointing manufacturing numbers were released, the dollar softened and we actually looked to be heading towards the positive side around lunchtime. Ahead of the bell, markets continued to falter as flood fears began to subside with the Army Corps of Engineers opening spillways to divert waters from reaching major refinery points in the Louisiana area.  At the close, Crude lost $2.49 to $97.17, HEAT shed .0678 to $2.8744 and RBOB tumbled .1433 to $2.9311.  Look for continued length to be shed with bounces in between as the current downward trend remains your friend.

heat chart

 

RBOB CLOSE
                 CLOSE       CHANGE 
  
JUN    29311       -.1433
JUL    29017       -.1146
AUG    28779        -.0969
SEP    28570       -.0847
OCT     27267       -.0723
NOV    27002      -.0668
HEAT CLOSE
          CLOSE    CHANGE
JUN    28744      -.0678
JUL    28886      -.0649
AUG    29030      -.0620
SEP     29197      -.0603
OCT    29360       -.0593
NOV   29524       -.0584
Read More

Topics: Spillways, IMF leader arrested, Dollar Strengthens

Futures plunge on dollar, data and demand

Posted by Mark Pszeniczny on May 11, 2011 10:08:00 AM

LADIES AND GENTLEMAN, PLEAS KEEP YOUR HANDS AND FEET INSIDE THE ROLLER COASTER AT ALL TIMES!  What else can you say about the last several sessions that has seen 25 cent drops, 30 cent rises and another 25 cent drop.  Overnight saw big drops on gas as what appeared to be an overbought speculative position put on Monday and Tuesday get sawed off as fears resurfaced that the European Union might not be willing just yet to jump in and help Greece. The subsequent reaction was a large jump in the Dollar, pushing commodities to the floor.  So much for those tight supplies due to flooding?  Bearish inventory data pushed the NYMEX down even further as Crude gained 3.8mbl, distillates fell by 800k and gasolines rose 1.3mbl as most were expecting moderate draws.  For the first time since Rita and Katrina days, the Trade was halted as RBOB losses pushed over 25 cents.  At the close, Crude tumbled $5.67 to $98.21, HEAT lost .1029 to $2.8983 and RBOB  lost and astounding .2569 to $3.1228.   At the end of the day, most were looking at demand figures that showed drops across all products, furthering the notion that Americans are either unwilling or unable to support retail fuel over $4 per gallon.   

heat chart
RBOB CLOSE
                 CLOSE       CHANGE 
  
JUN    31228       -.2569
JUL    30417       -.2121
AUG    29778        -.1800
SEP    29331       -.1567
OCT     27755       -.1373
NOV    27405      -.1330
HEAT CLOSE
          CLOSE    CHANGE
JUN    28983      -.1029
JUL    29123      -.1022
AUG    29262      -.1018
SEP     29426      -.1011
OCT    29587       -.1003
NOV   29740       -.1006
Read More

Topics: Greece Bailout, RBOB tumbles

NYMEX puts on rally hats to end day positive

Posted by Mark Pszeniczny on May 10, 2011 5:04:00 PM

We truly have moved to a market that is tick to tick.  We all recall the days when a .01 move in the market called for a meeting.  Today, right out of the gate RBOB was up .08 while HEAT limped along slower than Shaq last night and was negative most of the morning.  Early in the session for about 20 minutes, both pits tumbled with HEAT negative almost 4 cents.  Gasoline futures are spiking on concerns of Midwest flooding preventing shipments moving from key areas.  But with overall gasoline demand slipping last week and demand destruction appears to be settling in as retail pump prices hover around the $4 mark, todays jump seems somewhat nonsensical.  Imagine the gray hairs the station owners and gasoline end users have sprouted the last few sessions, from falling 20 cents one day to being up over 25 cents in the last two days!  With Wednesday comes another round of inventory numbers that are expected to show Crude levels build by 1mbls and products to show slight increases.  On another note, one which might have tempered todays gains, the NYMEX raised margin requirements making it more expensive for people to purchase futures, ultimately will have minimal effect on the course of business.  At the close, Crude added $1.33 to $103.88, HEAT found strength towards the close and gained .0394 to $3.0012 and RBOB led the charge jumping .1013 to $3.3797.

heat chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
JUN    33797       +.1013
JUL    32538       +.0894
AUG    31578        +.0776
SEP    30898       +.0662
OCT     29128       +.0610
NOV    28735      +.0605
HEAT CLOSE
          CLOSE    CHANGE
JUN    30012      +.0394
JUL    30145      +.0406
AUG    30280      +.0408
SEP     30437      +.0406
OCT    30590       +.0405
NOV   30746       +.0409
Read More

Topics: Inventory report, Midwest Flooding, Gasoline demand drop

Futures Tumble as length is shed with Jobs Data

Posted by Mark Pszeniczny on May 5, 2011 3:28:00 PM

As the saying goes " we buy in fear and sell in greed", today appears to be the perfect example of that old one.  Coming off the first three day sell off in over six months, the NYMEX was poised for a correction.  A new term put to the days action in the pits, a "flash crash" .  With all three major pits teetering on key support levels at the open, the technical sell off ensued as new unemployment figures were released that showed claims up by roughly 43k more than most estimates.  That, coupled with yesterdays slightly bearish inventory numbers, many sought to exit positions put on several weeks ago.  Again, it appears that we did find the event that would cause a correction, the key now is how much length is left and where will Bulls find a buying opportunity.  The last point to be made for a continued sell off will be to determine how demand will stand up with retail gasoline breaking $4.00 a gallon across most of the country.  From all indications, or today at least, demand destruction is weighing heavily on the minds of investors.  At the Close, Crude tumbled $9.40 to settle below $100 for the first time in weeks at $99.80.  RBOB lost a staggering .2271 to close at $3.0954 and HEAT led the charge with a whopping loss of .2561 to $2.8869. 

 
Daily Heating Oil Chart
heat chart
RBOB CLOSE
                 CLOSE       CHANGE 
  
JUN    30954       -.2271
JUL    30228       -.2352
AUG    29686        -.2391
SEP    29256       -.2403
OCT     27624       -.2410
NOV    27244      -.2409
HEAT CLOSE
          CLOSE    CHANGE
JUN    28869      -.2561
JUL    29020      -.2561
AUG    29169      -.2564
SEP     29345      -.2562
OCT    29513       -.2558
NOV   29676       -.2557

 

The information contained in this report has been taken from trade and statistical services and sources believed to be reliable. Dennis K. Burke, Inc. makes no representations or warranties with respect to the content of such news, including, without limitation, its accuracy and completeness. This bulletin is provided for informational purposes only, and is not intended as a recommendation to buy or sell commodities.
Read More

Topics: Jobless claims rise, CRUDE falls, Flash Crash

Markets plummet early on hit of HVT #1

Posted by Mark Pszeniczny on May 2, 2011 3:41:00 PM

On a day that for most of us was 10 years in the making, the sight of pits being down almost 9 cents  early this morning was almost surreal.  Over the last few months we have talked about "risk" or "violence" premiums built into the market, but today it was all about the "fear" premium that was erased overnight.  However, the Market being what it is, found a way to battle back and even trade higher for much of the session.  Finally finishing lower on the day with Crude falling .41 to $113.52, HEAT losing .0237 to $3.2521 and RBOB lading the charge falling .0505 to $3.3479.  As many talked how the removal of Bin Laden from the scene was a major win and will have impacts in the future of the markets, others began to chat up the power vacuum that may occur inside Al-Quida.  Most Political figures stressed the importance of remaining vigilant in the fight on terror.  Some cities even issued new warnings. All of us can remember life and markets pre 9/11 and in this "New Normal" market, we have always said that there needs to be an event or catalyst to change sentiment and direction.  This is the biggest one we could have had. 

heat chart
RBOB CLOSE
                 CLOSE       CHANGE 
  
JUN    33479       -.0505
JUL    33062       -.0432
AUG    32679        -.0383
SEP    32340       -.0322
OCT     30792       -.0262
NOV    30426        -.0239
HEAT CLOSE
          CLOSE    CHANGE
JUN    32521       -.0237
JUL    32669      -.0246
AUG    32817      -.0257
SEP   32977       -.0259
OCT    33124       -.0259
NOV   33263        -.0262
Read More

Topics: New Normal, Osama Bin Laden killed

NYMEX futures end mixed as concerns loom

Posted by Mark Pszeniczny on Apr 28, 2011 8:23:00 PM

What is funny about Todays title is that it seems that I have used it several times over the last month!  Another Groundhog Day with the Market up strong on the overnight, falling into negative ground late in the day and ending as a mixed bag at the close.  Investors were eager to jump in overnight as many weighed the FED Chairman's comments and the reluctance to raise interest rates.  The decision to keep rates extremely low signals to investors that the US economy still has some hurdles to jump before we are all fat and happy again.  That policy is weighing heavy on the greenback, pushing it to a 33 month low.  We all know the corollary is the high Crude and product prices as inflationary hedges from investors.  The news the economy only grew 1.8% last quarter while most were expecting a 3.1% increase did little to ease rising NYMEX prices.  Yet around mid session a sell off materialized that had both products negative for some time.  HEAT was able finish in the red as it fell a mere 18pts to $3.2316, RBOB keeps pushing higher as it gained .0104 to $3.4298, while CRUDE gained .10 to $112.86.  With $28 crack spreads on gas, it is not hard to see how Exxon posted 69% Q1 profits.   While it is easy to point to middle eastern unrest as the cause of this surge, it is tough to defend as supplies in the US are still at very healthy levels.  End result is that this bubble has to burst.  Hopefully soon. 

 

heat chart

 

RBOB CLOSE
                      CLOSE       CHANGE
 MAY    34298       +.0104
   JUN    33696       +.0114
     JUL    33230        +.0117
  AUG    32831       +.0100
  SEP     32443       +.0075
  OCT    30856        +.0062
HEAT CLOSE
          CLOSE    CHANGE
MAY    32316       -.0018
JUN    32459      -.0022
JUL    32619      -.0027
AUG    32785        -.0031
SEP    32951       -.0036
OCT    33103        -.0043
Read More

Topics: FED holds interest rates, Bernanke, Dollar falls

Jobs data, Inventories and Dollar lead to mix day

Posted by Mark Pszeniczny on Apr 21, 2011 3:43:00 PM

Another mixed end to another volitile session that saw both RBOB and HEAT finish on opposite sides of par.  Solid early morning gains built on Wednesdays DOE report that had all products reporting substantial draws, much higher than expectations, eventually gave way to news of yet another dismal Job report.  The number of Jobless claims missed analysts expectations by about 10,000 claims that sent the pits down at the Opening Bell.   Heat and RBOB were down almost .04 each as Crude remained strong on a falling dollar.  The Dollar continues to  hover around a 2 1/2 year low.  While strife continues abroad, the threat of barrels off the market appears to be taking a back seat.  The Saudi cartel have stated that there is no need for excess production as buyers appear to be limited.  As we mentioned, the volitility from day to day has remained with a downward bias.  The hope amongst peers is that at somepoint it falls off the shelf.  As a reminder, the NYMEX is closed Friday in observance of Good Friday.  At the Close Crude added 81 cents to $112.29, RBOB jumped .0313 to $3.3086 and HEAT fell .0222 to $3.1992.

DAILY HEATING OIL CHART

chart

 

RBOB CLOSE
                 CLOSE       CHANGE MAY    33086       +.0313
JUN    32723       +.0239
JUL    32425        +.0186
AUG    32141       +.0144
SEP     31848       +.0124
OCT    30337        +.0108
HEAT CLOSE
          CLOSE    CHANGE
MAY    31992       -.0222
JUN    32162       -.0197
JUL    32352       -.0181
AUG    32535        -.0169
SEP    32711       -.0157
OCT    32880        -.0150
Read More

Topics: Dollar falls, Jobless numbers

Futures End Down after Wild Session

Posted by Mark Pszeniczny on Apr 19, 2011 11:28:00 AM

NYMEX futures struggled to put together consecutive down days, and similar to the Bruins last night, it was a little tense right up to the end.  Futures opened down over 3 cents in both Pits and fell to as much as over five cents down before clawing all the way back, and actually trading positive briefly with about 40 minutes left in the day.  The days fall can be attributed to yesterdays news of Standard & Poors issuing a negative long term credit rating for the United States.  Highlighting that report was concern over the future of Commodity pricing and its effect on consumers.  Yet many are pointing to signals within the economy that could lead one to believe that we are well into a recovery.  Lets face it, last weeks DOE numbers were an aboration of refinery turns.  And as the pits turned stronger today, it centered around reports that gasoline demand jumped over 3% last week.  But that report is by spendingpulse.  Spendingpulse is a yardstick for usage of credit card customers.  Americans generally charge gasoline as a last resort to cash or debit. Thus the sell off continued.  At the close, front month Crude rose $1.03 on the expiry to $108.15. RBOB fel .0197 to $3.2331 and HEAT fell .0243 to $3.1585.  Keep in mind, we have not seen three consecutive down days since early FEB, and previously in early DEC.

 

heat chart

RBOB CLOSE
                 CLOSE       CHANGE MAY    32331       -.0197
JUN    31993        -.0191
JUL    31722       -.0161
AUG    31477       -.0131
SEP     31204       -.0085
OCT    29689        -.0087
HEAT CLOSE
          CLOSE    CHANGE
MAY    31585       -.0243
JUN    31725       -.0227
JUL    31895        -.0201
AUG    32062        -.0179
SEP    32226       -.0165
OCT    32391        -.0153
Read More

Topics: Gasoline demand drop, DOE, S&P Downgrade

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