Energy Market Updates

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.

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.

As always, the EIA site is an invaluable resource for snapshotting inventory, futures and spot pricing. I've highlighted some relevant snapshots below, but for more information you can also visit http://ir.eia.gov/ this will allow you to reference any of the weekly/daily inventory reports (weeklys are published every Wednesday)

Overnight action saw pits slightly higher as the market weighed the continued threat of Nigerian oil workers to join the General Strike that has paralyzed the Nation for the last several days.  Prior to the release of inventories, which many were still digesting the much less bearish EIA numbers from Tuesday night, the housing market got a boost with a report showing applications for homes were up 4.5% this period.  A bullish indicator for the economy in general. This kept the market trading on both sides of 0.00 much of the morning.  With the large builds across the board on the DOE report, the initial sell off fizzled away as the day wore on.  Again, only to late session heroics, as in the last 15 minutes pushed HO down .0368 to 3.0646, RBOB slipped .0095 to 2.7633 and Crude fell 1.37 to $100.87.  Adding to my notes yesterday, many commented on the disbelief of how range bound the Heat pit has been this year.  Below is an eight month snap shot and shows the caterpillar like chart.  A solidly defined range of 2.70 to 3.15.  Currently sitting at 3.06, lets hope that this pattern continues.

NYMEX futures struggled to put together consecutive down days, and similar to the Bruins last night, it was a little tense right up to the end.  Futures opened down over 3 cents in both Pits and fell to as much as over five cents down before clawing all the way back, and actually trading positive briefly with about 40 minutes left in the day.  The days fall can be attributed to yesterdays news of Standard & Poors issuing a negative long term credit rating for the United States.  Highlighting that report was concern over the future of Commodity pricing and its effect on consumers.  Yet many are pointing to signals within the economy that could lead one to believe that we are well into a recovery.  Lets face it, last weeks DOE numbers were an aboration of refinery turns.  And as the pits turned stronger today, it centered around reports that gasoline demand jumped over 3% last week.  But that report is by spendingpulse.  Spendingpulse is a yardstick for usage of credit card customers.  Americans generally charge gasoline as a last resort to cash or debit. Thus the sell off continued.  At the close, front month Crude rose $1.03 on the expiry to $108.15. RBOB fel .0197 to $3.2331 and HEAT fell .0243 to $3.1585.  Keep in mind, we have not seen three consecutive down days since early FEB, and previously in early DEC.

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....

As the morning began, we looked to head towards a session that was going to continue the downward slide after a brief bounce on Monday. That all changed as the opening...

While I thought we were in for a correction, I wouldn’t have thought in a million years that we would see 20 cents in gas and 15 cents in HEAT get wiped away in two...