Wild May Ends in Wild Fashion with HEAT retracement

Posted by Mark Pszeniczny on May 31, 2012 5:23:00 PM

Lets take a minute to put this month into perspective as we all recognize our short memories. On May 1, HO opened at 3.1783. Todays close of 2.7062 is an astounding .4721 cent retracement. For several weeks we spoke of a fall to the 2.75 level on prompt month Heat, and it has become a reality. With the majority of talk centered around the ongoing European crisis, today saw more length shed from Commodities on the heels of continued growing Crude stocks and some uninspiring job data. The delayed DOE report showed Crude adding 2.2mbbls against an expected build of 800k, yet gasolines fell 832k and a rather bullish distillate draw of 1.7mbbls, verses expectations of +200k and +500k respectively. Traders apparently feel that Crude levels are so robust, it far outweighs and week to week changes in refined products. Secondly, ADP's monthly report on new job growth fell short of expectations as it showed 133k unit gain. Support that figure was new jobless claims rose by roughly 10,000 this past month. All in all, the market continues to search for a bottom as the US dollar gains strength and length is pulled from Commodities. At the close, Crude fell 1.29 to $86.53, RBOB lost .0332 to $2.8250 and HEAT slipped another .0336 to $2.7062

Daily Heating Oil Chart

Heat map

RBOB CLOSE
CLOSE CHANGE
 
JUN 28250 -.0332
JUL 27227 -.0512
AUG 26676 -.0477
SEPT 26244 -.0444
OCT 24770 -.0430
NOV 24442 -.0408
HEAT CLOSE
CLOSE CHANGE
JUN 27062 -.0336
JUL 27032 -.0406
AUG 27130 -.0403
SEPT 27249 -.0394
OCT 27375 -.0385
NOV 27507 -.0380
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Topics: Jobless claims rise, HEAT, CRUDE

RBOB surges, HEAT ends lower

Posted by Mark Pszeniczny on Jan 18, 2012 4:40:00 PM

Early morning news of Hess shutting down its St. Croix facility from producing gas to strictly an oil storage facility sent RBOB futures higher some seven cents before the opening bell even rang.  Fear of tightening eastcoast gasoline supplies could not have hit at a worst time as ongoing tensions with Iran have again made headlines.  Iran appears to have got the eye, or wallet, the Saudis as they have gestured they are unwilling to pick up additional pumping left by removing Iranian barrels from the market place.  Realistically, this means that the Kingdom is comfortable with Crude above $100.  The trade seemed to cool off as the day moved on with large builds expected across all products in the delayed DOE report.  Additionally, looming concerns over the long term demand continue to be a bearish influence on any price breakouts beyond our current range.  At the Close, Crude fell 12 cents to finish at $100.59, RBOB surged .0541 to $2.8254 and Heat fell .0238 to $3.0134.

heat map

RBOB CLOSE
                 CLOSE       CHANGE 
  
FEB    28254       +.0541
MAR   28292      +.0496
APR    29480      +.0391
MAY   29340      +.0319
JUN   29053      +.0245
JUL    28713      +.0195

HEAT CLOSE
          CLOSE    CHANGE
FEB     30134     -.0238
MAR    30112      -.0223
APR     29995      -.0233
MAY   29859      -.0235
JUN    29808     -.0231
JUL     29850      -.0244
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Topics: St Croix, Hess, HEAT, RBOB

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
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Topics: HEAT, government shutdown, Libya, Market analysis

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
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Topics: HEAT, Libya, CRUDE, RBOB, Ghaddafi

Gas falls, HEAT holds as cold air hits

Posted by Mark Pszeniczny on Dec 15, 2010 9:57:00 PM

After yesterday’s downright balmy weather in the northeast, today brought us back to reality with temps in the low teens.  That cold air was a key factor in keeping HEAT pits positive today while gasoline values fell.  Front month HEAT gained .0027 to close at $2.4679 while RBOB lost .0220 to $2.2964.  Crude is still unwilling to move from its current range and settled at $88.28, down 33 cents.  The market continues to search for direction as Inventories are expected to show a draw in Crude supplies and builds in gasolines and distillates.  With gasoline demand reported to have fallen over 2% in the last week, but again those are credit card transactions which can be misleading, some sought to shed length.  On the flip side, Personal spending rose pointing to a better economic picture for some as hit the heart of the buying season for most Americans.  Based on the HEAT chart below, we are due for breakout in either direction, which way remains to be seen.  Interesting to note that it has been over two months since we saw this type of range bound trading.

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Topics: Gasoline demand drop, HEAT, The Market

Futures slip as cold blankets East

Posted by Mark Pszeniczny on Dec 10, 2010 9:56:00 PM

It appears to be the Oilman’s triple play today with Cold air, no snow and a falling market.  All we can say is Finally!  Early morning gains were wiped away upon news of the US trade deficit lowering and turning the dollar higher.  After yesterdays jump from what appeared to be a refinery issue (Fundamentals weren’t dead, they were just napping)  todays losses were a welcome sign.  As OPEC is scheduled to meet this weekend, the group is not expected to make any rate changes but they almost always throw their two cents in on prices.   With Crude hovering around the $90 mark, well above what most accept as a “reasonable” priced barrel, we can expect that the cartel will confirm the market is fairly priced.  Chatter is still surfacing that $100 Crude will be the average over the next 12 months, largely based on the assumption that demand should increase.   Awful lot of assumptions being made to hold this market this high.  At the end of the day, CRUDE fell .58 to $87.79, RBOB lost .0312 to $2.3093 and HEAT slipped .0093 to $2.4575. The week was largely a see saw finishing up around the same spot where we started, breakouts usually follow.

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Topics: HEAT, CRUDE, The Market

Sell off fails to materialize, prices dip

Posted by Mark Pszeniczny on Dec 6, 2010 9:54:00 PM

While I was watching FED Chairman on 60 minutes last night it occurred to me very early in the interview: Bernanke was very, very nervous.  Something I have never seen before, even in the midst of the crisis.  Furthermore, comments made about how our Nation’s economy was still “struggling to sustain itself”  appeared to rattle overnight investors.  Early session buyers flooded the market.  Yet in typical fashion, HEAT pits were unable to cross the $2.50 level which has held as the yearly high.  Keeping some pressure on HEAT was also the regions first shot of cold and wintery weather.  Both Maine and Southern Connecticut got hit along with areas in Eastern NY.  You won’t find many in our industry cursing the weather as it has been long over due.  Still many are keeping watchful eyes on their thermostats and purse strings as the recent Jobs report solidified a somewhat HO-HUM near term picture that our economy is not out of the woods yet.  $3 retail gasoline is not helping anyone out to boot!  At the close, Crude edge slightly higher to $89.38 gaining .19, RBOB lost .0104 to $2.3417 and HEAT fell .0117 to $2.4757.

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Topics: Bernanke, Jobless numbers, HEAT, RBOB

Futures soar after Holiday

Posted by Mark Pszeniczny on Nov 29, 2010 9:51:00 PM

NYMEX futures reached their highest levels in almost two weeks.  On the heels of a pre Thanksgiving jump, players got right back at where they left off on Wednesday.  Pushing values higher were news of Ireland accepting bailout funds over the weekend and as well as preliminary estimates of better than expected Black Friday and Cyber Monday sales.  To which I estimate my wife’s contribution to be half!  Despite the Dollar gaining against the world basket, NYMEX values continued higher all day without any regard.  The mild correction seen over the last two weeks appears to be stalled as Crude failed to break $80 and HEAT never got below the 2.23 level.  The HEAT pit looks to be comfortable trading in the 2.25 to 2.45 range.  With the bounce tied to an improving economic picture, it will be interesting to see how the markets react to consumer confidence news scheduled to be out Tuesday.  At the close, Crude $1.97 to $85.73, RBOB skyrocketed .0743 to $2.2846 and HEAT jumped .0419 to $2.3581.

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Topics: HEAT, The Market, NYMEX, Futures Soar, Ireland Bailout

Futures continue to rise, buying spree after pause

Posted by Mark Pszeniczny on Sep 20, 2010 9:51:00 PM

After Fridays close, we were cautiously optimistic that we might have some downside over the next few sessions. That theory was quickly thrown in the garbage can as news spread of the FMOC more than likely keeping interest rates at historically low rates. This appeared to cause a buying spree in all commodities and Crude was no exception. Current idea is that the state of the economy has investors worried, with the FED not moving rates, only solidifies their position. What is odd is that there is data out there that appears to support a more positive economic outlook. One of those is the DOT numbers that showed total miles traveled in July were up almost as full percent. But as we know, that fuzzy grey area between market perception and reality are often much farther apart than we understand. What we do know is that the pits appear to be comfortable within their current range with support still at the $1.95 level and resistance at the $2.25 area for HEAT. At the Close, Crude rose $1.20 to $74.86, RBOB gained .0304 to $1.9496 and HEAT vaulted .0402 to $2.1394.

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Topics: HEAT, The Market, NYMEX, FED rates, DOT numbers

After Gains, Futures content to stay range bound

Posted by Mark Pszeniczny on Aug 30, 2010 9:48:00 PM

After three days of solid gains that saw the HEAT chart move from testing support levels to meandering around mid range.  Today was somewhat uneventful even with 3 major stories playing in the minds of traders.  On Friday the FED chairman announced that they would take swift and immediate action to ward off any possible threat of a double dip recession which caused prices to continue to rise on Sunday night.  Additionally, Hurricane Earl, currently east of Cuba, is expected to move of the eastern seaboard and possibly give the Northeast a bath on Friday evening.  This event appears to be having a somewhat bearish reaction on the market as any storm away from the Gulf is a good thing.  Finally, Consumer spending for July came in slightly higher than expected and as a result a good sell off was seen in the pits.  What was lining up for another higher closed swiftly turned negative.  Again the range from 1.95 to 2.25 is intact and we are dead set in the middle of it as we were for most of July.  At the close Crude fell .47 to $74.70, RBOB lost .0138 to $1.9341 and HEAT led the way falling .0191 to $2.0252.  This week is typically a high vacation week with volumes thin, expect changes to be muted in either direction.

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Topics: HEAT, CRUDE, The Market, Hurricane Earl

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