Posts about:
Fuel prices sit about $.30 higher today than the beginning of the month as we broke out of the comfortable range in MAY through JUNE. The three week rally can mainly be tied to production cuts, unpredictable inventory reports and mostly an optimistic view on the overall health of the US economy. The bright side is we are over $1.00 lower than this time last year. The question remains, does this rally have any legs?
(image credit: Wikimedia Commons)
I feel like I have said this before, but what a difference a day makes! With yesterday market making its own reality, today i would say it got kicked in the pants BY reality. Futures started the session down hard and sold off heavily as a string of bearish data got reported. First was the July Home sales report that showed sales fell by roughly 3.5%, second was the jobless report for last week which increased by 9000 new claims. Generally not a good sign with an already weak economy. Lastly, Morgan Stanley downgraded their outlook for the remainder of the year, and within the report noted that it was cutting GDP estimates by roughly .3%. So what does all this mean? "There is Gold in them there hills"... Generally, news like this would push Commodities higher as equities would absorb the brunt of the sell off, but with values of Crude and products perceived to be overpriced, the selling carried over to the NYMEX. Keep in mind what we mentioned a few weeks ago, in order for things to start to improve, it has to start with cheaper fuel prices. Where that level is, only time will tell. At the close, Crude fell$5.20 to $82.38, RBOB lost .0871 to $2.7832 and HEAT shed .0868 to $2.8748
Last week we mentioned that it was going to be a sloppy back and forth week if a debt ceiling resolution was not passed. As shown below, that was exactly what materialized. Starting the week, HEAT was at 3.1280 and finished today at 3.0962 with all sorts of gyrations in between. As traders are not willing to commit either way as a resolution still looms and a tropical storm hitting the gulf region, it was somewhat surprising to see the market fall off as much as it did mid session. Both products were down as much as 4 cents on the heals of GDP data being released which showed the economy was basically flat. Furthermore, it notes that the recession was deeper than first thought and the economy is obviously growing at a much slower rate. There is growing sentiment that we will begin to encounter demand destruction at a growing rate if prices do not ease relatively quickly. At the close Crude fell $1.74 to $95.70, RBOB lost .0047 to $3.1129 and HEAT fell .0090 to $3.0962. This weekend will be critical as to how the Markets will shake out for the next few months, as a resolution should see lower prices
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...