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

Market Finally Falls after Calm Weekend

Posted by Mark Pszeniczny on Apr 11, 2011 9:58:00 AM

Futures tumbled today after seeing double digit increases in the HEAT pit on Friday as fear of prolonged unrest overseas and the possibilty of a Governmental shut down loomed.  At the eleventh hour a deal was struck to keep the U.S. Government running with both sides claiming victory.  New reports this morning had Libya tension cooling as a proposed peace deal is on the table.  The problem is, the deal calls for Gadhafi to remain in power.  As one would expect, the deal has been accepted by the current regime but rejected by rebel forces.  It was somewhat relieving to see our first down day in the last nine sessions.  We are all looking for a healthy correction of the speculative buying that has pushed HEAT higher by almost 20 cents in the last 10 days.  With warm air finally making its way into the Northeast, we should see some length get pulled out of the HEAT pit.  At the Close, CRUDE fell $2.87 to $109.92, RBOB lost .0602 to $3.2005 and HEAT tumbled .0672 to $3.2525.  As we have said many times, one day does not make a trend, but it would be nice if this was the start. 

 
Daily Heat Chart
heat map
RBOB CLOSE
                 CLOSE       CHANGE MAY    32005       -.0602
JUN    31867        -.0595
JUL    31741        -.0590
AUG    31562       -.0589
SEP     31305        -.0597
OCT    29909        -.0625
HEAT CLOSE
          CLOSE    CHANGE
MAY    32525       -.0672
JUN    32647       -.0645
JUL    32784       -.0620
AUG    32931        -.0591
SEP    33085       -.0571
OCT    33230        -.0556
Read More

Topics: HEAT, government shutdown, Libya, Market analysis

Bulls remain in control ahead of Inventory Data

Posted by Mark Pszeniczny on Apr 5, 2011 1:02:00 PM

What appeared to be a solid retreat this morning turned into another solid up day for the NYMEX.  The early morning session had both pits down over two cents in electronic trading as word of a Chinese rate hike hit the wires and a possible slow down in demand for the worlds second largest consumers.  Additionally minutes from last month FED Reserve meeting realeased today noted several members voicing concern over the rapidly rising energy costs and the effects that would have on the growth pattern of the country.  But by mid morning, sentiment had changed with news once again surfacing that the oil port town of Brega in Libya was back in control of loyalist forces.  Intensified fighting between France and Ivory Coast over the areas rightful President also pushed prices higher as the growing fear of worldly strife has many investors searching for the one investment that is insulated.  At the close, Crude actually fell .13 to $108.34 while RBOB jumped another .0325 to $3.2013 and HEAT topped out at $3.1850 up .0136.

Daily HEAT Chart
heat chart
Read More

Topics: CRUDE falls, Libya, Bull Market, Daily Heating Chart

NYMEX rises on jobs and overseas risk

Posted by Mark Pszeniczny on Apr 4, 2011 12:55:00 PM

RBOB spent much of the day bouncing back and forth from positive to negative before finally ending stronger.   Heating Oil never broke negative but did tease with it about mid day.  Depending upon which news wire you read, Libyan rebelshave either lost control of a major oil port city or regained full control.  The lack of credible reports coming from the crisis is playing into the risk premium.   New data was released this morning that shouwed the economy grew by 3.1% in Q4, slightly above the expected 3.0%.  Also psuhing values higer was data showing the economy created an addtional 31k jobs in the last month.  How much of that is seasonal workers is yet to be determined.  The rosey view and geopolitical risk that continues to spread over northern Africa and the Mid East has pushed HO above the $3.14 level, closing up .0369 to $3.1714.  RBOB moved higher by .0175 to close at $3.1688.  Crude reached an 18 month high before closing up .53 to $108.47.  We had said that the market appears to fade after HEAT touched $3.14, the breakthrough of that resistance level today lends to higher prices in the future. 

Daily HEAT Chart:
heat chart
Read More

Topics: Jobless numbers, Libya, Daily Heating Chart

Markets find strength ahead of Spring storm

Posted by Mark Pszeniczny on Mar 31, 2011 10:47:00 AM

With what appears to be a cruel joke by Mother Nature, sending us another 6 to 12 inches of snow for Friday, markets got the fuel they needed to push higher today.  While the winter weather may be a simple coincidence, the real driver today appears to the ongoing unrest in Libya.  After the President adressed the Nation Monday night, and all but assured us that NATO forces would take command and ground troops would not be committed, that plan is begining to look suspect.  Over the last few days, Rebel forces have made little if any ground against the Gaddafi regime.  Their reliance upon US and NATO air strikes to make any advances has put their chances of an overthrow in jeapordy.  This, even on the heels of a long time supporter of Gaddafi defecting.  Overnight the Lybian Foriegn Minister sought refuge, signaling to the West that the power appears to be fracturing.  However, with the President authorizing use of covert operations, many point to this as the first step in a drawn out conflict.  With Lybian product shut in, and Japaneese demand expected to pick up, we cant be all that surprised to see the bumps.  The key will be in how long it will take for the jump to be peeled off.  Speculative money appears in control for the time being and the slight drop in jobless claims is not facilitating a sell off by any means.  At the close, Crude rose $2.45 to $106.72, RBOB jumped .0436 to $$3.1076 and HEAT led the charge adding .0502 to $3.0898.
heat map
Read More

Topics: HEAT, Libya, CRUDE, RBOB, Ghaddafi

Crude rises as Products sell off late

Posted by Mark Pszeniczny on Mar 8, 2011 10:10:00 PM

Yet again the early morning fake out had most running to the racks early in the day. Overnight action had both products up over four cents with the ongoing Libyan situation heading closer a full out Civil War. Depending on who and when you are watching the news, reports come in from both sides that both the rebels or loyalist have retaken key areas and the latest is the oil port of Ros Lanouf. The West is apparently satisfied at this time to wage a war of words, calling for an end of Gadhafi’s bombings. Also seeking to institute a no-fly zone, speculative money continues to flood the Crude pit. Crude finished higher on the day ending up $1.02 to $105.44. Meanwhile some late day profit taking occurred in RBOB and HEAT. As we mentioned last week, some key resistance on HEAT was pegged at $3.14. Today we got to $3.1372 before falling all the back to finish at 3.0657 down .0236. Not that one day makes a rally but the about face that took place at the 1:00 p.m. hour was impressive, either that or someone decided it was time to cash out. RBOB was the biggest loser on the day falling .0425 to $3.0039. It’s funny how giddy we get now even on the slightest of down days.

Read More

Topics: The Market

Rally pushes on as strife continues

Posted by Mark Pszeniczny on Mar 1, 2011 10:09:00 PM

Futures soared higher again today as all eyes continue to be focused on the Mid East and Northern African Nations and the wave of civil unrest that has gripped that region.

Only a week ago it appeared that the Libyan crisis was cooling with a possible quick exit by its Leader. That was 7 days and 25 cents ago….  As Iran has been said to clamp down and imprison opposition leaders and with Algerian news outlets reporting some growing protest, the main fear is that demand will outpace the supply. With the Saudi’s announcing they will foot the bill for any excess barrels left on the table, who wouldn’t want to be investing in Saudi Arabian refineries right now! Crude goes up $2.66 today to $99.63, jackpot! From the “ No Duh” file, FED chairman Bernanke spoke today and did little for the cause as he declared rising commodity prices would hurt the economy, but not produce massive inflation. More likely a short term rise in consumer gas prices.

With Funds bow controlling roughly 23% of the long positions in the Market; it will be interesting to see where the selling will start, and yes, it will happen. It was interesting to note that a gasoline demand report by Mastercard showed a 3% increase in demand last week, but some of that can be attributed to panic buying as consumers tried to beat the next price increase.

At the close, HEAT jumped .0846 to $3.0235 and RBOB soared .0907 to 2.9834. Let’s hope to find some relief in Wednesday’s DOE report.

Read More

Topics: The Market, Libya, rising gas prices

Middle East turmoil causing price surge

Posted by Mark Pszeniczny on Feb 21, 2011 10:08:00 PM

Presidents Day is historically a quiet day as most participants are off for the long weekend, but today’s moves have bucked the historical trend.

Values have surged in electronic trading up over .08 cents on HEAT and over .06 cents on RBOB. Crude is currently trading at $91.42 up $5.22! On what do we owe this pleasure? Over the weekend continued political unrest came to a head in Libya as forces fired on crowds marching for the overthrow of the Gadhafi regime. Gadhafi, in recent years, appeared to be kowtowing to the West. As the movements seen in Egypt spread throughout the Mid East and into the OPEC member nation of Libya, many investors are playing it safe and have pushed HEAT back up to the $2.80 level. New reports have Gadhafi fleeing to Venezuela overnight, but have yet to be confirmed. The ultimate fear is not that Democracy will spread to the region, but that a regime worse than what is in place takes power and impedes production. This instability could not have come at a worse time for the Oil markets, already what most contend to be largely overbought trade. Libya exports about 1m bbls per day, certainly one of the smaller OPEC nations, and easily absorbed if the 1.6 billion barrels of strategic reserves were tapped, but significant none the less. Long term, this appears to be a good thing, we just need to live through the short term pains.

Read More

Topics: OPEC, Libya, Market analysis

Recent Posts

Posts by Topic

see all