NYMEX Collapses as Last Weeks Gains Erased
What a difference a week makes! Last Monday we were gearing up for a strong week ahead of QE3. Today saw the entire weeks gains in the Heating Oil pit get erased, finishing slightly below last Mondays close down .0761 to $3.1634. That is after the pit pulled back some even more robust losses that at about 1:30 had HO down .12 and RBOB down just over .11 cents. We said the 3.25 level on prompt month HO was a pretty strong resistance area and today's OCT HO high just happened to be 3.2500. Technical- schmechnical, it appears as though rumors abound that there was an SPR release of gallons happening. To which is still do not fully understand, if the Government has to maintain required levels in the SPR, are they not just selling high and replacing at a lower price later? To be clear on QE3, of which the Fed is buying back some $4 billion in mortgage backed securities, this had and still has the potential to be bullish for commodities should the dollar fall. But lets live for today and be happy the market fell today. Crude finished down $2.38 to $96.62 and RBOB lost .0723 to 2.9433.