Energy Market Updates

NYMEX values appeared to find support just above the 2.90 level on front month HO after a long cold stretch.  The Polar Vortex that gripped a large portion of the Country, and plagued us in the Northeast with long terminal lines, appears to be subsiding.  Many of us are getting a well deserved breather as we return to somewhat normalcy.  

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.  

As news continually breaks on developments on the Syrian conflict and the potential implications of US or other world power intervention in the region, stocks are dropping and commodities are going through the roof.

All news today was nothing but feed for the Bulls that have been in control of the pits over the last week.  After HO dipped below 2.95 late last week, buying has come back with force.  Today was strong out of the gate and while RBOB was tamed slightly, HO kept right on rolling.  NOAA models now show Tropical Storm Erin churning in the mid Atlantic with an expected path set on Puerto Rico for sometime late next week.  First storm of the season always brings the buyers out.  Data on the economic front showed the US had the lowest unemployment claims in just over six years.  While this is good for the economy, not so good for Future pricing.  Along side that, most now expect the FED to significantly slow down their Bond buying program over the next sixty days as the economy shows signs of improvement.  Finally, the continued and recently heightened unrest in Egypt, has many concerned over the regions safety.  Egypt largely controls the Suez canal which is a vital shipping lane for Crude barges, anything that can remotely affect Crude shipments will push futures higher.  Still optimism remains as RBOB shrugged off the news and was only able to muster a 15 point gain to close at $2.9845, while HO jumped another .0250 to $3.0728 ( the high end of the wide range  we have been in) .  Crude added .48 to $107.33.  I stay optimistic for lower prices coming as the semi mixed close is always a key point to momentum swings.

Overnight trading set the tone for much of todays session as early markets were up well over two cents on both products. News out of European Markets showed that Greece's credit rating had been upgraded along with an unexpected increase in the consumer confidence among Germans had pushed the US dollar lower. Commodities were the unfortunate collateral damage in this scenario. More importantly, it appears that some movement by GOP leaders to increase taxes on those Americans making over $1 million a year (Phew, I'm safe!) has been seen as a major concession in the stalled talks. Again, Bullish on Commodities. Lastly, the DOE's released the weekly numbers that showed draws in distillates and Crude, -1.1mbl and 949k respectively, with a modest build in gasolines, +2.2mbl. The report was viewed as Bullish by most even with Crude missing the expectations of a 1.3mbl draw, evidence of the mentality of the day already given up to higher prices. Look for action to continue higher as a historical light trading week winds down and HO stays well within the 2.90 to 3.10 range we have been in for the last 90 days. At the close, Crude gained $1.58 to $89.51, Heat added .0391 to $3.0356 and RBOB led gaining .0522 to $3.7431.

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

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.