Renewed Global Concerns Reverse Tuesday's Futures Sell Off

Posted by Mark Pszeniczny on Nov 13, 2013 2:07:00 PM

We have all been in this far too long to get overly excited when the pits fall a few cents - like New England weather, wait and it will change.  

The recent sell off was primarily pinned to the expectation of growing Crude supplies (released this week on Thursday due to the Holiday), a better than expected Jobs report, and the talk of unwinding the government bond buying program.  That all came to a halt this morning as renewed concerns of global strife, specifically Libya, filled the newswires.  

Brent Crude surged early and brought the US markets along for the ride. Still, I have to give weight to some of the technical aspects, as HO has bounced higher again after touching the 2.85 level.  Recall, this has been the much talked about seasonal support level that has yet to be broken for more than a session.   

Heat still remains comfortable trading in the wide range of 2.85 to 3.05, with small breakouts to either side.  One would expect RBOB to get more volatile as global demand expectations have recently been revised higher and the current values appear to be relatively inexpensive.   

At the close, Crude gained .84 to $93.88, RBOB closed up +.0416, and HEAT settled out +.0445

 

RBOB Close
                      CLOSE     CHANGE            
DEC   2.6280         +.0416
JAN   2.6131         +.0387
FEB    2.6180         +.0359
MAR    2.6304         +.0337
APR    2.8004         +.0323
      MAY   2.7990         +.0344      
HEAT Close
      CLOSE            CHANGE
DEC   2.8977        +.0445
JAN   2.9014        +.0434
     FEB    2.9041        +.0419     
 MAR   2.9024        +.0405 
APR   2.8988        +.0393
 MAY   2.8955        +.0386 

heat chart 2013 november

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Topics: Brent Crude, Jobless numbers, Libya, Market analysis, CRUDE, RBOB

Bulls Remain in Control of Markets

Posted by Mark Pszeniczny on Jul 16, 2013 5:45:00 PM

July 16th - Energy Bulls showed their muscle today by posting solid gains after an ever so slight dip yesterday.  On the back of an early weak dollar, RBOB and HO were up almost .03 cents in the early morning.  After what appeared to be some resistance touching, futures slid to even shortly after Open outcry, even posting some negative numbers.  The slide was short-lived as traders began to focus on this weeks inventory levels that are projected to show a draw of roughly 3mbls of Crude, signaling a rising demand.  Small refinery news and traders rolling positions into AUG also contributed to today's rise.   Personally, I have said for months that HO is stuck in this large new normal range of 2.75 to 3.05, being at the top of that range now, one has to speculate at how much higher we can go.  At the close, Crude was able to shed some pounds finishing down .32 to $106.00, HO added .0208 to $3.0469 and RBOB gained .0314 to $3.1343.  RBOB appears to be driving the market so Wednesdays price action will be intresting.

Energy market heat chart

RBOB Close
               CLOSE         CHANGE        
 AUG   3.1343         +.0314
SEP   3.0530         +.0227
OCT   2.8702       +.0186
NOV    2.8074        +.0137
DEC    2.7655       +.0094
JAN    2.7437       +.0057
HEAT Close
      CLOSE            CHANGE
AUG    3.0469       +.0208
SEP    3.0464       +.0186
OCT    3.0449       +.0167
NOV    3.0426      +.0138
DEC    3.0401       +.0113
JAN    3.0382       +.0091

 

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Topics: Dollar Struggles, Bull Market, Daily Heating Chart, RBOB

Futures Move Higher as Stimulus Plan Takes Shape

Posted by Mark Pszeniczny on Sep 10, 2012 3:52:00 PM

While much of todays chatter centered around the wild cash blowout of gasoline on Friday, up some .24 in NY harbor, markets found a way to turn positive ahead of the close. Many are betting that a new round of Quantitative Easing, also known as QE3, will be announced after this weeks FED meeting. This bet was doubled down after Fridays disappointing payroll figures.While the stimulus plans are designed to boost economic activity, Commodity prices are often collateral damage and many agree that we might see higher prices with this round. Keeping the pits in check are the fundamentals which, even besides this weekends short term blowout, the nation is well supplied. Additionally there was a memo sent by the Saudi Oil Minister confirming the oversupply of product as well as the unsubstantiated value of the current marketplace. Look for the remainder of the week to be a wild one. At the Close, Crude finished up .12 to $96.54, HEAT gained .0179 to $3.1668 and RBOB .0044 to $3.0240

 

Daily Heating Oil Chart

Heat map

RBOB CLOSE
CLOSE CHANGE
 
OCT 30240 +.0044
NOV 29051 +.0059
DEC 28304 +.0059
JAN 28013 +.0054
FEB 27965 +.0058
MAR 28059 +.0059
HEAT CLOSE
CLOSE CHANGE
OCT 31668 +.0179
NOV 31674 +.0167
DEC 31666 +.0167
JAN 31639 +.0173
FEB 31524 +.0186
MAR 31322 +.0192
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Topics: CRUDE, RBOB, QE3, Basis Blowout, Saudi Oil Minister

Refinery Explosion and Storm Fears Push RBOB Higher

Posted by Mark Pszeniczny on Aug 28, 2012 8:11:00 AM

The speculators jumped on the buying train as soon as trading opened Sunday evening and we saw RBOB jump to as high as 3.2050 (+.1250)before cooling off ahead of open outcry. The Explosion at the 650k bpd Amuay refinery in Venezuela is said to have caused at least 25 deaths and substantial damage to the surround area. With all the devastation, the unit is said to be back online by the end of the week. This facility is said to supply roughly 360 bpd of gasolines to the east coast. Additionally, the threat of Hurricane Isaac to the Gulf region has skyrocketed RBOB values. The storm, expected to make landfall sometime Tuesday evening, appears to be taking the same path as Rita and Katrina. This time however, it is much smaller in size and most offshore rigs have been evacuated and shutdown. The key to remember about storms is while it does take product off the market, it also reduces demand. The fact that HEAT finished marginally higher is a big win for Bears, considering it was up over .07 at one point. At the Close, Crude actually closed down .68 to $95.47, HO was up .0017 to $3.1118 and RBOB jumped .0768 to $3.1548.

WEEKLY HEAT CHART

weekly heat chart

HEAT
Close Change
SEP 3.1196 +.00170
OCT 3.1195 +.00080
NOV 3.1196 -.00540
DEC 3.1186 -.00920
JAN 3.1162 -.01210
FEB 3.1013 -.01380
RBOB
Close Change
SEP 3.1548 +.0768
OCT 2.9500 +.0395
NOV 2.8389 +.0049
DEC 2.7747 -.0112
JAN 2.7450 -.0180
FEB 2.7387 -.0209



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Topics: RBOB, Venezuela Refinery Explosion, Hurricane Isaac

Futures Spike on Bullish DOE Numbers

Posted by Mark Pszeniczny on Aug 1, 2012 4:01:00 PM

After last nights API data release that showed Crude suffering a massive 11.2 mbl draw, most were awaiting todays DOE numbers with one eye closed, hoping it was an aberration. For those watching the screens at precisely 10:30 this morning you saw Rbob spike 4 cents and HO jump 3. While not as horrific as an 11 million barrel draw, Crude still lost 6.5mbl according to the DOE. Gasolines fell 2.2mbl and distillates fell 974k. Still, far more than expectations. Other Bullish influences to the Market early were the Federal Reserve meetings that many had been betting on another round of stimulus. That gamble didn't pay off as a short time ago they announced that while the economic turn around has slowed, it doesn't warrant another round of stimulus... yet. The interesting note to the entire session is that Crude, at its peak today, was only up $1.50. In the last half hour of the trade, HO looked to be going negative as the air was let out of the balloon. RBOB inflated to much to peel off any of the gains and finished up .0599 to $2.8342, HO gained .0108 to 2.8588 and Crude added .85 to $88.91. Thursday sets up to be another exciting day with Jobless figures due out at 8:30.

Heat map

RBOB CLOSE
CLOSE CHANGE
 
SEPT 28342 +.0599
OCT 26281 +.0447
NOV 25322 +.0401
DEC 25398 +.0370
JAN 25282 +.0334
FEB 25322 +.0320
HEAT CLOSE
CLOSE CHANGE
SEPT 28588 +.0108
OCT 28663 +.0105
NOV 28748 +.0101
DEC 28819 +.0108
JAN 28869 +.0113
FEB 28831 +.0104
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Topics: DOE, Daily Heating Chart, RBOB, Crude draws, Stimulus

NYMEX Surges with Better Than Expected Growth

Posted by Mark Pszeniczny on Apr 2, 2012 4:35:00 PM

You hear us talk about it all the time. Expectations. What do a certain group of people expect to happen or be reported versus what is in fact reality. In a world economy that has taken one hit after another, when "reality" exceeds expectations, it is cause for celebration. In our case, speculation. Todays wild reversal was primarily due to the Purchasing Managers Index, PMI. This benchmark is used by many economist to gauge growth and or contraction. And just like any report, pundits put their spin on what is to be expected. Today showed that the US economy grew at a more robust rate in March than was to be expected, and at a higher rate than February. This caused many who got out of positions last week, to load the back up this today. Even more wild was that the markets were down over .02 early in the session. By the time the closing bell rang, a weeks worth of losses were wiped away with RBOB surging .0741 to $3.3822, HEAT adding .0795 to $3.296 and Crude tacking on $2.21 to $105.23. With a short week on tap due to Good Friday and another set of Job data due out Wednesday, investors were not willing to let the buying opportunity pass. Again, the overall theory being that a growing economy can continue to support higher fuel prices. I tend to believe history on this topic rather than investors.

heat map

RBOB CLOSE
CLOSE CHANGE
 
MAY 33822 +.0741
JUN 33137 +.0644
JUL 32554 +.0607
AUG 32010 +.0619
SEPT 31472 +.0648
OCT 29878 +.0668
HEAT CLOSE
CLOSE CHANGE
MAY 32496 +.0795
JUN 32562 +.0768
JUL 32634 +.0743
AUG 32712 +.0731
SEPT 32781 +.0728
OCT 32835 +.0728
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Topics: RBOB, PMI

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

Positive Sales and Demand Data boosts RBOB

Posted by Mark Pszeniczny on Jun 14, 2011 5:05:00 PM

Early morning trading pushed all pits higher as news spread of Chinese Crude imports jumping 6%.  With a Market desperately looking for direction, the slightest potential shift in sentiment can have large scale implications.  As the morning moved on, and gasoline demand numbers were reported as an increase of 1.1% over last week, the buyers took early control and never looked back.  Very similar to what happens when you score 4 goals and 6 minutes, a la Bruin nation, it makes for an early day.  The empty netter was a retail sales figure that showed the losses were better than expected only showing a .2% decrease while a .3% decrease was anticipated.  Remember, it is all about expectations.  So it will be interesting to see how Wednesday plays out as most expect for builds across the board with the DOE numbers.  While we are still some 22 cents off the high seen back in early April, we are only 27 cents off the low in early May.  Again this range of 2.85 to 3.35 on Heat while vast appears to be the new normal.  A very hard close pushed values higher with about 10 minutes left in the session.  HEAT was teetering on even ground only to end up .02 to $3.1258, RBOB soared .0678 to $3.0646 and Crude added $2.07 to $99.37, still under the mythical line in the sand of $100 a barrel.

heat chart
RBOB CLOSE
                 CLOSE       CHANGE 
  
JUL     30646       +.0678
AUG    30250      +.0461
SEP    30069     +.0399
OCT    28897       +.0341
NOV     28676       +.0314
DEC    28554      +.0301
HEAT CLOSE
          CLOSE    CHANGE
JUL    31258       +.0200
AUG    31391      +.0189
SEP    31563     +.0187
OCT   31734      +.0180
NOV   31914       +.0181
DEC   32069       +.0182
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Topics: Chinese Crude Builds, RBOB

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

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

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