Energy Market Updates

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CRUDE (5)

Commodities, Stocks See-Saw on Sanctions, EIA, Unemployment, and Tech


Wednesday's EIA report showed that the API projected Crude drops come to fruition, falling 1.78 million barrels. As we all saw this pushed up Crude & ULSD prices on the day, with ULSD closing up .0398 to 2.9275, and Crude up to 100.81, once again hanging by the new (unfortunately) benchmark of $100 we've all been hoping to drop from for quite some time now. 

Brent ticked upwards this week as well on EU discussion of stricter sanctions on Russia. Putin had announced earlier this week that Russian troops had withdrawn from the border, but no such withdrawal happened according to everyone else in the area, so more sanctions are back on the table it appears. Economic sanctions on the world's second largest energy exporter are, unsurprisingly, not great for downward price pressure. 

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Futures Firm After Almost 2 Week Correction

NYMEX values appeared to find support just above the 2.90 level on front month HO after a long cold stretch.  The Polar Vortex that gripped a large portion of the Country, and plagued us in the Northeast with long terminal lines, appears to be subsiding.  Many of us are getting a well deserved breather as we return to somewhat normalcy.  

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NYMEX Futures End Positive for Fifth Straight Session

All news today was nothing but feed for the Bulls that have been in control of the pits over the last week.  After HO dipped below 2.95 late last week, buying has come back with force.  Today was strong out of the gate and while RBOB was tamed slightly, HO kept right on rolling.  NOAA models now show Tropical Storm Erin churning in the mid Atlantic with an expected path set on Puerto Rico for sometime late next week.  First storm of the season always brings the buyers out.  Data on the economic front showed the US had the lowest unemployment claims in just over six years.  While this is good for the economy, not so good for Future pricing.  Along side that, most now expect the FED to significantly slow down their Bond buying program over the next sixty days as the economy shows signs of improvement.  Finally, the continued and recently heightened unrest in Egypt, has many concerned over the regions safety.  Egypt largely controls the Suez canal which is a vital shipping lane for Crude barges, anything that can remotely affect Crude shipments will push futures higher.  Still optimism remains as RBOB shrugged off the news and was only able to muster a 15 point gain to close at $2.9845, while HO jumped another .0250 to $3.0728 ( the high end of the wide range  we have been in) .  Crude added .48 to $107.33.  I stay optimistic for lower prices coming as the semi mixed close is always a key point to momentum swings.

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Futures Rise as Cliff gets Less Steep and DOE's Draw

Overnight trading set the tone for much of todays session as early markets were up well over two cents on both products. News out of European Markets showed that Greece's credit rating had been upgraded along with an unexpected increase in the consumer confidence among Germans had pushed the US dollar lower. Commodities were the unfortunate collateral damage in this scenario. More importantly, it appears that some movement by GOP leaders to increase taxes on those Americans making over $1 million a year (Phew, I'm safe!) has been seen as a major concession in the stalled talks. Again, Bullish on Commodities. Lastly, the DOE's released the weekly numbers that showed draws in distillates and Crude, -1.1mbl and 949k respectively, with a modest build in gasolines, +2.2mbl. The report was viewed as Bullish by most even with Crude missing the expectations of a 1.3mbl draw, evidence of the mentality of the day already given up to higher prices. Look for action to continue higher as a historical light trading week winds down and HO stays well within the 2.90 to 3.10 range we have been in for the last 90 days. At the close, Crude gained $1.58 to $89.51, Heat added .0391 to $3.0356 and RBOB led gaining .0522 to $3.7431.

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