NYMEX continues higher ahead of DOE data

Posted by Mark Pszeniczny on Feb 7, 2012 5:40:00 PM

With the Heating oil pit tacking on over 15 cents in just under a week, many are scratching their heads as to why.  In a winter that has seen more 50 degree days than teens, most would assume the Heat pits to be tanking.  As with the case with these types of patterns, shifts in the jet stream have caused the Northeast to have a mild winter yet Europe is caught in a bitterly cold spell for some time.  Brent Crude has maintained its $20 premium to its cousin WTI, thus explaining the HO to WTI disconnect.  As shown below, that disconnect has been in place most of the year.   Longer term, you may start to see more US vessels head to European markets, signaling some shortfalls down the road.  Many are still on edge as Greece is continuing to try and find a way to pay off creditors and with Iran and Israel in a stare down, the tightening supplies across the pond are having nothing but bullish affects on the trade.  At the close, Crude added $1.50 to $98.41, RBOB slipped .0004 to $2.9275 and HO gained another .0343 to $3.1909.  Again we have touched the top of the 18 month range for HO, then next 30 days have typically seen a healthy pull back.  But again, what is typical anymore?

Continuation crude chart, continuation heating oil chart, RBOB continuation chart, continuation natural gas chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
MAR    29275      -.0004
APR    30674      +.0000
MAY   30572     -.0002
JUN     30296       +.0002
JUL     29951       +.0009
AUG    29590       +.0014
HEAT CLOSE
          CLOSE    CHANGE
MAR    31909      +.0343
APR     31595      +.0342
MAY    31294      +.0318
JUN    31080      +.0288
JUL     31017     +.0268
AUG     31014      +.0246
Read More

Topics: Iran, European Economy, CRUDE

FOMC Stance pushes Commodities Higher

Posted by Mark Pszeniczny on Jan 26, 2012 4:27:00 PM

Late yesterday we saw the overnight pits shoot higher once news surfaced that the FED was of the position to keep fund rate very low through the foreseeable future.  Citing continued slow economic growth, a European debt crisis, (that I recently read to be compare to "a pimple on a teenage boy") and a persistent unemployment rate that is still around 8.5%, the FED is still considering another round of quantitative easing later this winter.  Commodities have responded positively as the greenback fell to a six week low early this morning.  Still positive signs of an improving economy are are out there as durable good orders for December showed a 3% increase which unfortunately has a bullish effective on Futures.  The range for Heat has not broke and we continue to see sideways action as shown in the chart below.  At the end of the day, Crude added .30 to $99.70, RBOB gained .0128 to $2.8466 and HEAT jumped .0343 to $3.0535.

heat chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
FEB    28466       +.0128
MAR   28508      +.0134
APR    29794      +.0165
MAY   29664       +.0173
JUN   29368       +.0167
JUL    29008       +.0167
HEAT CLOSE
          CLOSE    CHANGE
FEB     30535     +.0343
MAR    30446      +.0342
APR     30244      +.0318
MAY   30043      +.0288
JUN    29911     +.0268
JUL     29899      +.0246
Read More

Topics: Commodities, European Economy, FED holds interest rates, FED rates

NYMEX Stumbles with Stonger Dollar

Posted by Mark Pszeniczny on Jan 20, 2012 4:33:00 PM

Fears of yet another Greece loan default were on the minds of many investors today as futures showed moderate losses as the dollar strengthened.  Greece is hoping that banks will forgive roughly $130 billion in debt due in the next few months.  If only my bank would forgive half of my mortgage, I would be a happy man!  Positive news from the housing industry was reported as existing home sales increased 5% in December.  The market couldn't rally enough today and with gasoline demand falling over 6% in a month on month comparison, the threat of demand destruction in a slightly improving economy is a real concern.  It is hard to believe that we have seen six down days in the last seven sessions in the Heat pit.  We have peeled off almost 10 cents during that time frame.  This following our prediction that once we touch 3.10ish we should pull back.  As this has been the pattern for the year.  Looming over the weekend is a European vote on accepting Iranian oil, as reports of US ships moving out of the region.  As a quick snow event moves through the region this weekend, lets all remember to keep those fills clear and accessible.  Crude fell $1.93 to $98.46, RBOB lost .0310 and HEAT lost .0476 to $2.9884.

heat chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
FEB    27844       -.0314
MAR   27903      -.0325
APR    29242      -.0293
MAY   29128      -.0295
JUN   28843      -.0297
JUL    28490      -.0303
HEAT CLOSE
          CLOSE    CHANGE
FEB     29884     -.0476
MAR    29848      -.0487
APR     29720      -.0475
MAY   29550      -.0469
JUN    29460     -.0469
JUL     29485      -.0462
Read More

Topics: European Economy, Iran Sanctions, Greece Bailout

Futures Slip with Mixed Inventory Report

Posted by Mark Pszeniczny on Oct 26, 2011 8:26:00 PM

Much of the morning session saw values bounce around from positive to negative as pre DOE posturing held court.  Also holding weight was the curiosity factor of what was going to happen at the European Summit to discuss the ongoing debt issue.  As the news of a Crude build of 4.7mbl, a Distillate draw of 4.3mbl and a Gasoline draw of 1.4mbl hit the wires the initial reaction was bearish as the huge glut of Crude took center stage.  That was short lived as many looked to distillates as the leading pit and another large draw has now put distillates stocks smack dab in the middle of the 10 year range.  Over the past several weeks we have operated on the higher end of that range.  The selling only hit the floor with about 30 minutes left in the session as continued optimism remained that a long term solution to Europe's debt crisis will be agreed upon.  Signs pointed that way as earlier in the day, Germany, a key figure in the deal, voted to add more to its growing rescue fund.  An effort in that other nations will follow.  While we still are on the high end of the range, and a solid down day is refreshing, nothing out there is a clear signal that we are ripe for another pull back.  Again, the HEAT pit appears to be comfortable trading in the wide range from 2.70 to 3.10.  At the close, Crude lost $2.97 to $90.20, RBOB fell .0482 to $2.6516 and HEAT lost .0344 to $3.0158. 
heat map
RBOB CLOSE
                 CLOSE       CHANGE 
  
NOV    26516       -.0482
DEC    26253      -.0494
JAN    26111      -.0474
FEB   26049      -.0445
MAR   26075      -.0416
APR    27387      -.0374
HEAT CLOSE
          CLOSE    CHANGE
NOV    30158     -.0344
DEC   30210      -.0302
JAN   30101       -.0304
FEB   29929      -.0316
MAR   29663     -.0323
APR   29260      -.0312
Read More

Topics: Commodities, European Economy, Greece Bailout, Bull Market, CRUDE

Futures surge on proposed European debt plan

Posted by Mark Pszeniczny on Sep 27, 2011 3:26:00 PM

You know the Market is searching for direction when values and sentiment shift on an unofficial report of the European debt plan.  The plan is focused on three keys tenets.  First, Greece is going to be allowed to default on 50% of their debts (must be nice, I wish i could default on 50% of my mortgage.)  Second, the size of the European debt relief fund will expand dramatically and Third, the plan will re-capitalize the European Central bank.  Based on the jump in the Dow and in Commodities, the plan is being greeted with open arms.  Coupled with the forecast of draws in inventories again this week, values started up strong and did not look back all day. Technically speaking, we have commented frequently of the 2.80 support level of HEAT. For the fourth time in a year, we have hit the 2.80 level and yet again appear to be poised to bounce off it.  At the close, Crude added $4.21 to $84.45, RBOB screamed higher by .1261 to $2.6955 and HEAT jumped .0851 to $2.8766.  Assuming we ave confirmed another short term bottom, may not be a bad time to look at layering in some sort term fixed pricing.
heat map
RBOB CLOSE
                 CLOSE       CHANGE 
  
OCT    26955       +.1261
NOV    26360      +.1076
DEC    26011      +.1003
JAN   25849        +.0936
FEB    25841        +.0888
MAR    25898      +.0860
HEAT CLOSE
          CLOSE    CHANGE
OCT    28766    +.0851
NOV   28857    +.0827
DEC   28898      +.0796
JAN   28936     +.0767
FEB   28838      +.0733
MAR   28662      +.0705
Read More

Topics: European Economy, Greece Bailout

NYMEX dips ahead of Presidential Speech, DOE's Mixed

Posted by Mark Pszeniczny on Sep 8, 2011 9:24:00 PM

Although the market finished down, it was not until very late in the session that we felt somewhat comfortable that it was a certainty.  Early morning jobs data reported yet another increase in unemployment claims, up 2k to 414k, Commodities fought their way back into positive ground as investors rushed for a safe haven.  The new information will be a key tenet for tonights Presidential address on the state of the economy, which could shift the markets in either direction.  The White House is expected to announce yet another round of stimulus spending, roughly $300 billion, on infrastructure and tax cuts.  Additionally, reports of the European Central Bank reporting what they perceive as "significant downside risk" to the European Economy.  With the mixed DOE report of Crude losing 4mbl and Gas and Distillates adding 198k and 708k respectively, while surprising , kept any major losses in check.  I would expect next weeks numbers to have the full impact of the past weeks weather, specifically in the Northeast.  It has become increasingly more difficult to determine how news will be perceived in the eyes of  market participants, what was once a bullish news day has now turned to a cautiously bearish one.  At the close, Crude slipped .29 to $89.05, RBOB lost .0228 to $2.8852 and HEAT lost .0313 to $3.0443.

heat map

RBOB CLOSE
                 CLOSE       CHANGE 
  
OCT    28852       -.0228
NOV    28351      -.0255
DEC    28044      -.0273
JAN   27976        -.0290
FEB    28020        -.0296
MAR    28099      -.0297
HEAT CLOSE
          CLOSE    CHANGE
OCT    30443    -.0313
NOV   30526     -.0330
DEC   30603      -.0344
JAN   30689     -.0358
FEB   30646      -.0363
MAR   30515      -.0363
Read More

Topics: European Economy, President Obama Address, Jobless claims rise

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