Futures end month on soft note

Posted by Mark Pszeniczny on May 28, 2010 9:09:00 PM

Thursdays buying frenzy continued into this morning session as early morning markets were up over 3 cents. A variety of news items led to the jump yesterday most importantly was the announcement of a “busy” hurricane season and the President declaring a 6 month halt on offshore drilling so the current process can be evaluated. While since 2004, every hurricane season has been forecasted as busy, that wolves cry has begun to fall on deaf ears. The true reason for Thursday looks to be more of traders adding length ahead of the long weekend before getting out of Dodge. As we said the overnight jumped on the momentum and continued as the GDP reported 3% growth and unemployment benefits fell by roughly 14k last week. But in true NYMEX fashion, rather than shooting higher, the markets reversed around noontime and actually traded negative, losing over 3 cents in value. The seesaw action looks to continue as we bounce between the 1.90 and 2.00 range for HEAT. The tension mounts as we wait and see if the length gets peeled off on Tuesday. At the close, JULY RBOB went off down .0088 to $2.0266, JULY HEAT lost .0052 to $2.0045 and CRUDE lost .58 to $7397.

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Topics: moratorium on offshore drilling, unemployment benefits fall, GDP up, The Market, NYMEX

NYMEX reverses on economic news, to end day higher

Posted by Mark Pszeniczny on May 24, 2010 8:36:00 PM

The early morning session had all the makings of another big down day as news spread that China may be scaling back some of their economic recovery plans. And fears mount that Japan is not too far behind. The reverse came as existing home sales reported a better than expected increase in units. The dramatic sell off in the last few week has brought out the bottom feeders and judging by the chart below, they appear to be ready to turn this around. We had pinpointed the 1.8850 level as a possible bottom and so far that support level has held, this goes all the way back until the first week of February. The real question is there enough steam in the train to move south even more after the two day dead cat bounce. Even with the Dow soft, I tend to think that the 45 cents lost in value in the last two plus weeks has shaken the tree enough prior to the summer. At the end of the day Crude managed to stay above $70 closing up .17 to $70.21, RBOB added .0096 to $1.9708 and HEAT gained .0026 to $1.8993.

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Topics: Market analysis, The Market, NYMEX

NYMEX gives back Wednesday gains

Posted by Mark Pszeniczny on May 13, 2010 8:33:00 PM

The difference in todays action than yesterdays was that RBOB and HEAT actually followed Crude in finishing lower. With NatGas inventories showing a slightly smaller injection than expected, prices were held in check for most of the morning until turning sharply negative by early afternoon. The only other major item of note was that the Jobs data released showed that the labor market is improving, but at a slower rate than anticipated. Just as is the case with everything in this business, how well we perform against expectations (whosever they may be) is used as the instrument of judgment and market direction. The lack of news hitting the wires kept the pits lower without any reason to make a run. As mentioned, we will probably be held within this 2.09 to 2.16 range until some defining news pushes us one way or another. The downside bias still exists, even with OPEC appearing to thin exports. At the Close, Crude dropped $1.25 to $74.40, showing a slight disconnect between the products. RBOB lost .0153 to $2.1951 and HEAT fell .0272 to $2.1319.

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Topics: The Market, NYMEX

Mixed Data has NYMEX end Mixed

Posted by Mark Pszeniczny on May 12, 2010 8:32:00 PM

With the weekly inventory report came a mixed bag and subsequently a mixed close. As shown below, the largest variance was seen in gasolines which was the only thing that kept the trade positive today. Crude suffered losses finishing down 72 cents to $75.65, while products closed higher. RBOB added .0152 to $2.2101 and HEAT gained .0190 to $2.1591, further widening refining cracks. As we speak, Crude has fallen another 30 cents in aftermarket trading. Many are looking at demand, which has seen gasoline demand rise 10% over the same period last year and distillates rise almost 8% month on month. This after the EIA cut their demand outlook! How much of this is due to a strengthening economy remains to be seen. My sense is that demand, like IQ, wasn’t starting from a very high place so any increase is huge. Long and short, it looks as though we will be range bound for several sessions as investors keep a hairy eyeball on Europe and the DOW to evaluate how the financial crisis reverberates through the continent.

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Topics: gasoline demand rises, Inventory report, CRUDE falls, The Market, NYMEX

NYMEX slip as next move deliberated

Posted by Mark Pszeniczny on Apr 28, 2010 8:19:00 PM

In what was a slow news day had the futures market bouncing between positive and negative territory for much of the morning session. With durable good orders on the rise in March, some might put another feather in the hat of bulls. But the inability of the pits to stay above some key resistance areas, HEAT was unable to stay above $2.25 and Crude fell below $85, has to play into the minds of players that another correction can be in the cards. We have discussed a number of times over the last few weeks that the market is searching for direction and fundamentals do not support current price levels. With many personalities at the Atlantic Region Energy Expo the next few days, I wouldn’t expect any wild swings in the market. Furthermore, speaking with some retail operators over the last few days, gasoline demand appears to still limping along. At the end of the day, Crude slipped 92 cents to $84.02, RBOB fell .0122 to $2.3409 and HEAT dropped .0134 to $2.2371.

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Topics: AREE, Gasoline demand drop, The Market, NYMEX

Supplies rise and so does NYMEX??

Posted by Mark Pszeniczny on Apr 21, 2010 8:05:00 PM

After last nights wildly bullish API report that had all products showing healthy draws, we were expecting the worse this morning. As DOE’s broke and showed builds across the board, the very bearish report did little to curb the enthusiasm of players. Initial reaction had all the pits shed early gains and prior to the lunch hour most were trading in the red. It was truly an odd day as investors appear to be looking at gasoline demand and how that will affect summer pricing. Psychologically, with MAY Crude falling off the board today, it firmly puts in our heads that summer is here. How much of todays move on HEAT was attributed to European flights resuming remains to be seen. At the Close, JUN Crude fell .17 to $83.68, RBOB added .0018 to $2.2827 and HEAT showed the most strength adding .0256 to $2.2058. However bizarre today was, I would have to think that if there was a little more time in the day all products would have closed negative. Outside influences have overtaken fundamentals currently and when that happens, we usually see a breakout in one direction or the other.

WEEKLY INVENTORY NUMBERS

Crude +1.894

Gasoline +3.587

Distillates +2.096

Utilization 0.3%

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Topics: DOE, API report, NYMEX, weekly inventory numbers

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