Energy Market Updates

Bears were out in full force today (actually saw them hit after the close on Monday) as all eyes were watching election results in Italy.  No clear cut winner has been announced thus casting doubt and uncertainty on recently passed austerity measures.   The effect saw the US Dollar rise against the World basket forcing Commodities to fall harder than Tom Brady's Agents Commission check.  Adding to the sell off was increasingly better news from the housing market with December values showing a .2% increase and 6.8% increase year on year.  All this and as I walked into a lunch saw Fed Chief Bernanke on a big screen TV saying the economy is far better off than in recent years and that the FED is currently looking at ways to end its quantitative easing policies.  Today had a flurry of news to push pricing down, but I still hang my hat on  the saying "high prices is the cure for high prices"  as we exit the heating season in the Northeast and some retail stations above $4.00 a  gallon,  some would say the US economy would struggle to support these energy costs.  At the close, Crude lost .48 to $92.63, HEAT fell .0672 to $3.0317 and RBOB tumbled .0795 to $2.9816. 

Gasoline futures continued to sell off today after starting the early morning in the green. RBOB was up as much as 2 cents prior to the opening bell on news of Spain having a successful bond sell off to avoid yet another European debt scare. That bullishness turned however as Germany was said to be at odds with other Nations on how to proceed with the European Zone bailout plan. Simultaneously, Moodys was said to be ready to announce a downgrade of France's debt rating that caused the US dollar to push higher. A higher Dollar generally has a negative affect ( or positive affect from some viewpoints) on Commodities. Crude looks to be poised to fall below $100 for some time, getting as low as $101.67 before closing at $102.27, down .40. NatGas inventories were in line with estimates and on a whole remain roughly 700 bcf higher than the 5 year average. Even with the sessions slight bump in HO, finishing up .0069 to $3.1251, we are still roughly .15 less than two weeks ago. RBOB continues to be the dog falling another .0486(almost .25 in two weeks) to $3.1541. While it is nice to see the prices fall, realistically most think another .25 needs to be pulled off to get back to a "normal" state.

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.