Energy Market Updates

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.  

July 16th - Energy Bulls showed their muscle today by posting solid gains after an ever so slight dip yesterday.  On the back of an early weak dollar, RBOB and HO were up almost .03 cents in the early morning.  After what appeared to be some resistance touching, futures slid to even shortly after Open outcry, even posting some negative numbers.  The slide was short-lived as traders began to focus on this weeks inventory levels that are projected to show a draw of roughly 3mbls of Crude, signaling a rising demand.  Small refinery news and traders rolling positions into AUG also contributed to today's rise.   Personally, I have said for months that HO is stuck in this large new normal range of 2.75 to 3.05, being at the top of that range now, one has to speculate at how much higher we can go.  At the close, Crude was able to shed some pounds finishing down .32 to $106.00, HO added .0208 to $3.0469 and RBOB gained .0314 to $3.1343.  RBOB appears to be driving the market so Wednesdays price action will be intresting.

Bears were out in full force today (actually saw them hit after the close on Monday) as all eyes were watching election results in Italy.  No clear cut winner has been announced thus casting doubt and uncertainty on recently passed austerity measures.   The effect saw the US Dollar rise against the World basket forcing Commodities to fall harder than Tom Brady's Agents Commission check.  Adding to the sell off was increasingly better news from the housing market with December values showing a .2% increase and 6.8% increase year on year.  All this and as I walked into a lunch saw Fed Chief Bernanke on a big screen TV saying the economy is far better off than in recent years and that the FED is currently looking at ways to end its quantitative easing policies.  Today had a flurry of news to push pricing down, but I still hang my hat on  the saying "high prices is the cure for high prices"  as we exit the heating season in the Northeast and some retail stations above $4.00 a  gallon,  some would say the US economy would struggle to support these energy costs.  At the close, Crude lost .48 to $92.63, HEAT fell .0672 to $3.0317 and RBOB tumbled .0795 to $2.9816. 

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