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

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

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

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

Inventory report keeps losses at bay

Posted by Mark Pszeniczny on Jul 14, 2010 9:46:00 PM

Estimates had Crude falling 1.5mbl with the gasolines flat and distillates building by 1.0mbl. The early losses had pits down over 2 cents but as of 10:30 that changed with another massive draw in Crude stocks. For the second week in a row, Crude fell by 5mbls, Gasolines built by 1.6mbl and Distillates built by a whopping 2.9mbls. While the products set a bearish tone, the huge draw in Crude has some believing that we may be at the beginning of a run up due to increase demand and the recent round of positive earning numbers. Without the draw of Crude, we should have seen yesterdays increases get peeled off, thus the numbers kept the losses in check most of the day, even turning positive for some of the afternoon. As we have seen, the range of 1.90 to 2.10 on HEAT appears to remain intact. 1.90 levels still hold as buy in and sentiment looks to be cautiously bearish. With current freight indexes down slightly on a month to month basis, demand, from a street perspective is still marginal at best. At the end of the day, Crude actually fell 11 to $77.04, RBOB lost .0156 to $2.0665 and HEAT lost .0113 to $2.0361.

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Topics: CRUDE falls, The Market, Distillates Build

Bulls in driver seat after third up day of specultative buying

Posted by Mark Pszeniczny on Jul 9, 2010 9:44:00 PM

With the short trading week coming to a close, and what is typically a slow week, was anything but. Inventories showed a large draw in Crude but slight builds in the products, but more importantly was the stock market breaking the 10,000 mark thus implying renewed economic hope. Renewed hope signals increase fuel demand which brings about higher prices. HEAT appears to be still locked in the 1.90 to 2.05 range, and even with the third session in a row of gains, most appear to be skeptical that these levels hold for any length of time. The jump of 14 cents over the last three days appears to be pushed most by speculative investors buying the levels seen last touched back in late May after that dramatic two week fall. (see chart below) Buy on the dips as the old saying goes, and speculative buying lead to speculative selling. At the close, Crude added .34 to $75.77, RBOB gained .0258 to $2.0511 and HEAT rose .0266 to $2.0053. Look for more volatility next week as many return from vacations to find a slightly overpriced market. As a side note, Dennis K Burke is pleased to announce the launch of our newly designed web site. Please visit us at www.burkeoil.com !

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Topics: The Market, Crude draws, Speculative Buying

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