Storm fear fades, prompting sell off: Crude tumbles

Posted by Mark Pszeniczny on Jun 29, 2010 9:40:00 PM

As quick as we saw the jump on Friday, we had thought that it was storm fear buying. And today brought vindication of those thoughts as I woke to a market down over 5 cents in both pits. As the opening bell rang, the buyers could not contain themselves prompting prices to claw back a few cents only to be weighed down by overriding fundamentals. The first named storm of the season is projected to miss most of the producing region in the Gulf and make landfall off US soil south of the tip of Texas. Product remains plentiful, even with expected draws in both Crude and gasolines this week while distillates are expected to show mild increases. As Wednesday’s expiry approaches, technical selling and booking profits for the quarter might push values down even further. At the close, Crude tumbled $2.31 to $75.94, RBOB lost .0656 to $2.0720 and JUL HEAT lost .0720 to $2.0213. The range appears to be widening some, but most are still unwilling to commit one way or the other.

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Topics: The Market, CRUDE falls, Expected Draws in Crude and Gas

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

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

Weak Jobs push Markets south, destroy extended rally

Posted by Mark Pszeniczny on Jun 4, 2010 9:24:00 PM

The sideways action continues as a healthy correction has once again seen buyers run for the hills. On the heels of healthy construction spending and new home sales, and some bullish inventory numbers, the Jobs data that was released today wiped away any chance of an extended rally. Most were expecting healthy increases in jobs but once the census workers were removed from the data, jobs actually were flat, setting off a firestorm of selling in all markets. The Dow was down over 300pts and the Euro continues to get hammered against the greenback. Short term, the prompt HEAT contract in the $1.85 to $1.95 range looks still to be defining the 5 to 7 o’clock hour on the clock. Anywhere in this range appears to bring out the buyers. Longer out is going to heavily depend on demand and when OPEC feels the need to jump in. At the Close, HEAT fell .0814 to $1.9577, RBOB lost .0859 to $1.9953 and Crude lost $3.10 to $71.51. The prevention of the magical third up day has most assuming the sideways action or range bound trading will continue.

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Topics: The Market, OPEC, HEAT, Weak Jobs Report

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: NYMEX, The Market, OPEC, Commodities

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: NYMEX, The Market, Construction Spending Up

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

Futures shrug off DOE’s, end higher

Posted by Mark Pszeniczny on May 26, 2010 8:39:00 PM

In what appears to be an about face to recent trends, the Pits reacted strongly overnight to yesterdays API report that showed Gasoline taking a whopping 3.2mbl hit. That message was contradicted this morning with the official DOE report that showed Crude build by 2.4mbl, Gasoline fall by only 200k bls and distillates draw by 267k barrels. The rather bearish report, when compared to estimates that had Crude only adding 250k barrels, was pushed aside as value seekers jumped on an already fast moving train. So much so that right after the report was released, again this is bearish news, the markets jumped higher. The length that was shed over the last few weeks appears to be burning a whole in the pockets of the funds. Or they could simply see this as buying opportunity as they did in late January. Again with Front month HEAT touching, but not breaking that 100% retracement level, expect to see sideways action until the next round of economic news is released. Many will focus on the Far East and their economic health as well as the tie to the dollar. At the close, Crude vaulted $2.76 to $71.51, RBOB rose .0396 to $1.9704 and HEAT gained .0490 to $1.9207.

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Topics: API report, The Market, DOE, HEAT, CRUDE

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: NYMEX, The Market, Market analysis

NYMEX continues to slip on Jobless Report Numbers

Posted by Mark Pszeniczny on May 20, 2010 8:34:00 PM

The last three days has left me feeling the same way I do after watching an episode of “LOST”…. What the hell just happened??? Values have plummeted on European financial fears, Greenback gains and as Hedge funds dumped length at every turn. Todays fall was accelerated as a Jobless report showed an unexpected climb in claims, but a glimmer of hope for Bulls appeared as the market put their rally hats on and fought off an 8 cent decline in the HEAT pit and closed down only .0433 to $1.9019. RBOB lost .0507 to $1.9645 and Crude dropped $1.86 to $68.01. As we mentioned a while back, we saw a major resistance level at the $2.05 level, as that was broke earlier in the week, the technical selling pushed values all the way down to the 100% retracement level of $1.85, to which we touched today. That level held and the bounce off looks to define the pre season low. But we said that about $2.05. Long and short of it the near 50 cent drop in values has given many a second bite of the apple. As shown below, the play in early FEB was a home run for 3 months, we could be in that cycle.

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Topics: The Market, Jobless claims rise

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