Energy Market Updates

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Distillates Build

Futures Turn on Stimulus Talk

Much of what we view every day in this business is based primarily on expectations and ultimately, reality.  Today was precisely one of those days.  While most expected slightly bearish inventory numbers, the news at 10:30 that showed Gasoline's up 2.6mbl and Distillates up 2.3mbl well beat expectations of builds of 700k and 800k respectively.  Pits reacted by selling off over four cents in each HO and RBOB.  With Crude showing a draw of 600k barrels while many expected a build of the same amount, you had to think how long the fall would last.  At the same time, the European Zone released figures that showed its GDP fell for the sixth straight quarter.  Soon talk of more FED stimulus took over the trade and the buy back gained momentum.  From what started out as a solid down day, turned on the expectation of what we think might happen, thus pushing the NYMEX higher by the closing bell.  At the close, Crude gain .09 to $94.30, HEAT added .0071 to $2.8801 and RBOB led the charge jumping .0294 to $2.8670, almost .10 higher than the intraday low.... Looks like some expect a busy driving season.

 

RBOB Close
      Close            Change
JUN    2.8670       +.0294
JUL    2.8480       +.0276
AUG    2.8192       +.0260
SEP    2.7853       +.0247
OCT    2.6407       +.0190
NOV    2.6130       +.0166
HEAT Close
       Close            Change
JUN    2.8801       +.0071
JUL    2.8742       +.0080
AUG    2.8797       +.0095
SEP    2.8892       +.0107
OCT    2.8977       +.0111
NOV    2.9031       +.0107
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NYMEX Stays Range Bound with Strong Pull Back

Most pundits have been warning of upside breakout potential with this market for the last several sessions. When you really look at HO for the last four months, the defined range of 2.95 to 3.05 has held, with conviction. As much as I try to disprove the techies with fundamental basics, I am batting roughly .146 since October. That's a slump!

Although, we must point that todays selling seemed to be a reaction to China data reporting that runaway inflation is imminent. The news should have sent futures higher but those trying to avoid risk proceeded to sell off. Additionally, the Saudi Group has acknowledged lower production rates, signaling to the investors that demand may be waning in the weeks to come.

This weeks massive builds in products weighed heavy today in the minds of traders as many had to decide to be long or short with it almost 40 degrees in mid January. At the close, Crude fell .26 to $93.56, HO lost .0458 to $3.0085 and RBOB slipped .0538 to $2.7395

DAILY HEATING OIL CHART

Heat map

RBOB CLOSE
CLOSE CHANGE
 
FEB 27395 -.0538
MAR 27543 -.0483
APR 29165 -.0381
MAY 29072 -.0375
JUN 28771 -.0253
JUL 28422 -.0335
HEAT CLOSE
CLOSE CHANGE
FEB 30085 -.0458
MAR 30018 -.0438
APR 29901 -.0422
MAY 30210 -.0410
JUN 30050 -.0398
JUL 29969 -.0385
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