DOE’s tempt Futures to sell off

Posted by Mark Pszeniczny on Dec 8, 2010 9:55:00 PM

You wouldn’t know it from looking simply at the closing figures that todays inventory report was initially viewed as wildly Bearish.  Confirming last nights API report with a draw of 3.8mbl in Crude, a build of 3.8mbl in gasolines and a build of 2.2mbl in distillates, pits tanked over 3 cents down around 10:30 this morning.  The losses were short lived however as others focused on demand numbers that showed some strength.  Additional reports of severe cold stretching from Northern Maine to South Florida fed the mid day rally that had HEAT pits dancing in  positive ground after lunch.  Again, on the surface, it appears the NYMEX wants to go lower, and the $90 resistance level of Crude appears to be holding.  But as to why we are not seeing the dramatic falls, like we saw the dramatic rises are beyond my explanation.   Even with the large draws in Crude, inventories are still well above last year and a lofty 25mbl over the three year average.  As I have said it appears Fundamental analysis is dead.  At the Close, Crude slipped .41 to $88.28, RBOB lost .0184 to $2.3046 and HEAT fell only .0095 to $2.4607, this after touching the $2.43 level earlier in the day.

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Topics: The Market, API report, NYMEX, Distillates Build

NYMEX continues rally higher

Posted by Mark Pszeniczny on Dec 2, 2010 9:53:00 PM

Speaking with an associate today we were amazed to both discover that last year at this time we over 40 cents less than now.  But that is ancient history.  Today continued yesterdays skyrocketing session that had pits touching year high levels yet again.  With Bulls jumping on reports of “Crude averaging $100 over the next year” and “home sales up 10%” it gives the much needed ammunition to buy the rumor and sell the fact.  Not that we are in the same scenario as last April, but remember HEAT touched 2.50 and then proceeded to fall to under $2, again, ancient history.  Fundamental factors appear to be creeping into the bullish sentiment.  Spot gasoline is said to be in short supply in the Northeast due to Venezuela refinery issues and distillates are being fueled by a brash of cold air heading into the Northeast.  Its hard to understand the weather issue as I still haven’t put a winter coat on.  At the close, Crude added $1.25 to $88 even.  RBOB soared another .0549 to $2.3553 and HEAT bolstered another .0490 to close at $2.4546.  Time to close our eyes and hope for a fall.

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Topics: Bull Market, CRUDE, The Market, NYMEX, Venezuela Refinery

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

NYMEX Bulls remain in power

Posted by Mark Pszeniczny on Sep 13, 2010 9:49:00 PM

All too often in this Industry we hear or see things that so called experts attribute to the rising cost of fuel. The vast majority of these events are so far away from our personal bubble that it is hard for the normal person to understand the affects. So for the past several days we have talked about the Enbridge Pipeline leak that has put the entire market into a free for all as we head into turnaround time. This pipeline has the capacity to supply roughly 700,000 bpd to the US, more importantly a key end point in this pipeline is Cushing, Oklahoma. Cushing is often considered as the benchmark point for Crude in the US. So even though we know there are ample amounts of Crude throughout all PADD’s, with Cushing stocks off, the psychology among investors is that there is or will be a shortage of Crude, implied or otherwise. Lesson is, the Oil market is a small, small World. With China showing stronger than expected Manufacturing rates last month, the rally carried on today. Heat has risen over 17 cents in almost two weeks. Again, the bounce of the front month contract off the $1.95 level for the fourth time this year appears to have solidified the yearly low. At the close, Crude gained .74 to $77.19 (slightly above the widely talked about resistance level of $77. RBOB added .0075 to $1.9806 and HEAT lead the charge gaining .0183 to $2.1227.

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Topics: The Market, NYMEX, Enbridge Pipeline

NYMEX continues to slide, tests support

Posted by Mark Pszeniczny on Aug 23, 2010 9:47:00 PM

With only 3 up days to speak of in the last two weeks, the early morning gains have become increasingly more difficult to give any credence to. The day saw pits start off up over a penny a piece but as the opening bell range, price fell off the shelf. Front month RBOB, under pressure as a lame duck product, fell .04 cents in a matter of minutes. As investors continue to point towards struggling economic picture as reasons for the retreats, the failure for HEAT to break the $1.95 support level tells another story. For the third time since Mid May, HEAT has touched the $1.95 area only to shoot to the $2.20 level in the following 30 day stretch. Not that past performance is any indication of future potential, but it sure does look convincing. (see chart below) As the day wore and the Dollar got stronger, it appeared that funds were content in some profit taking. At the Close, Crude fell .72 to $73.10, HEAT dropped .0156 to $1.9554 and front month RBOB lost .0441 to $1.8810 while OCT RBOB lost only .0285 to $1.8390.

DAILY HEAT CHART

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Topics: Daily Heating Chart, The Market, NYMEX, Dollar Strengthens

Seesaw action ends with mixed day, blame Chinese currency fluctuation

Posted by Mark Pszeniczny on Jun 20, 2010 9:35:00 PM

Late Sunday night I was surprised to see values up over 2 cents because after Friday’s movement I would have expected some sharp drops. That is until I saw China announced that their currency would be allowed to fluctuate against other currencies. This would/should weaken the dollar to Chinese investors thereby making Crude and its products more affordable. Thus Crude now becomes a safe haven against a falling dollar for other investors, pushing values higher. Additionally, all goods become cheaper to China spurring US manufacturing rates and another economic boom is on the horizon! That was 7pm last night, as of 3pm today, eh … not so much. Profit taking ensued pealing values all the way back to zero and RBOB actually finished negative on the day, down .0048 to $2.1428, HEAT stayed positive closing at +.0170 to $2.1459. CRUDE mustered up enough strength to close up .64 to $77.82. I wish I can say this is the last of the recent rally, but that can only be determined after a few mixed sessions like we saw today. With month end and quarter end quickly approaching, expect some more downside as the big guys looks to book profits.

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Topics: Dollar falls, The Market, NYMEX, Profit taking, Chinese Currency

NYMEX waivers ahead of Inventories

Posted by Mark Pszeniczny on Jun 8, 2010 9:34:00 PM

We had anticipated some sideways action over the next few sessions as traders decide which bandwagon to jump on. Nothing was more evident than today that saw thin news have short, sharp impacts on the trade. After a moderately low start, both products were down over a penny, news of a Natural gas pipeline explosion boosted values until mid morning as FED chairman Bernanke spoke on how the economic recovery is ongoing, we probably wont “feel” it for sometime. As what has been the theme for going on several weeks, the uncertainty around the health of the economy will slosh around the trade until we have defining technical or fundamental reasons to move in either direction. Looking out further, with the Chinese government intentionally slowing their economy to curb massive inflation concerns, it may have longer consequences on the US. With estimates of inventories being mixed, don’t expect any clearer view of direction in Wednesday’s session. At the close, Crude added .55 to $71.99, RBOB fell .0058 to $1.9891 and HEAT managed to edge out a loss of .0030 to $1.9653.

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Topics: Natural Gas Pipeline Explosion, Bernanke, The Market, NYMEX, Chinese Currency

Futures show solid gains on home sales

Posted by Mark Pszeniczny on Jun 2, 2010 9:12:00 PM

It was one of those days in the pits as the market opened positive and stayed there all day. After yesterday’s impressive construction spending report and today’s strong Home sales news, buyers appeared willing to jump back into Commodities. Many point out that we still look to be oversupplied, but by how much, should be defined as the inventory report gets released on Thursday. As we see so often, and shown by the chart below, a good deal of buying occurs after a floor appears to be defined. Hindsight being perfect of course. One should note how little we have heard from OPEC over the last few weeks during the correction. This is also typically about the time when news outlets will pick up stories on gas prices. Remember the street pricing being several days behind what the NYMEX does. All in all, the taking back of yesterdays losses today was somewhat expected as the sideways action should continue prior to the first named storm of the season. At the close, Crude gained a mere .28 to $72.86 yet RBOB jumped .0436 to $2.0261 and HEAT added .0355 to $2.0059.

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Topics: Commodities, The Market, OPEC, NYMEX

NYMEX bounces, end negative

Posted by Mark Pszeniczny on Jun 1, 2010 9:10:00 PM

Almost on cue, the NYMEX sold off overnight as length added on Thursday was peeled away as what typically happens ahead of a long weekend. But, a surprise was in store as reports of May construction spending hit the wires and showed the largest monthly increase in years of 2.7%. Again, we weren’t starting from a very high number. The range bound action looks to continue for the short week as Inventory numbers will be delayed a day. What is surprising is with “Top Kill” of the leaking well officially dead, we haven’t seen a dramatic jump in prices. A few years ago, Crude would be $100 a barrel on such an event. The sensibility in the markets, fear of a still weak world economy and the overall bearish tone have kept the spill all but in check. As we mentioned last week, the Far East appears to be next in line for some economic Darwinism as weekend violence in Spain and Portugal spread due to those Governments actions to combat the worsening economy. Look for the see saw trade to continue as be ready for buying opportunities as some good values are still out there. All products fell hard into the close with Crude losing $1.39 to $72.58, HEAT lost .0341 to $1.9704 and RBOB fell .0441 to $1.9825

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Topics: Construction Spending Up, The Market, NYMEX

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