Prices for August 26th, 2009
| HEATING OIL cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | SEP | 186.97 | 181.68 | 185.20 | dn 00.39 | | OCT | 189.50 | 184.00 | 187.52 | dn 00.43 | | NOV | 191.82 | 186.80 | 190.16 | dn 00.30 | | DEC | 194.33 | 189.58 | 192.89 | dn 00.24 | | JAN | 196.01 | 192.90 | 195.91 | dn 00.11 | | FEB | 197.97 | 194.90 | 198.13 | dn 00.00 | | MAR | 199.35 | 195.97 | 199.48 | up 00.15 | | APR | 198.09 | 197.29 | 200.18 | up 00.10 | | MAY | ---.-- | ---.-- | ---.-- | -- --.-- | | JUN | 202.07 | 199.69 | 202.03 | dn 00.00 | | JUL | 201.50 | 201.50 | 203.68 | dn 00.00 | | AUG | 204.48 | 202.38 | 205.38 | dn 00.00 | | Estimated Volume (day before) total all prev day 94,069 | | NYMEX CRUDE OIL dollars per barrel | | MONTH | HIGH | LOW | SETTLE | CHANGE | | OCT | 72.64 | 70.67 | 71.43 | dn 00.62 | | NOV | 73.37 | 71.40 | 72.19 | dn 00.59 | | DEC | 74.08 | 72.13 | 72.98 | dn 00.53 | | JAN | 74.70 | 72.85 | 73.68 | dn 00.47 | | FEB | 75.13 | 73.43 | 74.33 | dn 00.41 | | MAR | 74.92 | 74.04 | 74.95 | dn 00.37 | | | | | | | | | Estimated Volume… 514,836 Opec Basket…$71.71 dn $1.18
Prompt #2 Oil NYH 88..-1.75 to -1.25, 74 Lo S…+0.75 to +1.25
US Gulf 88 grade…-5.50 to -5.00, 74 grade Lo S…-3.75 to -3.25
Group .........+3.75 to +4.25 Lo S.....+3.75 to +4.25
Chicago ......-2.50 to -1.50
cash quotes by Dow Jones | | | |
| NYMEX RBOB GASOLINE cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | SEP | 202.24 | 197.30 | 198.26 | dn 02.44 | | OCT | 188.74 | 182.47 | 184.68 | dn 02.55 | | NOV | 187.00 | 182.15 | 184.23 | dn 02.12 | | DEC | 187.77 | 183.19 | 185.26 | dn 01.88 | | JAN | 189.00 | 185.75 | 187.49 | dn 01.76 | | FEB | 191.05 | 188.35 | 189.88 | dn 01.57 | | MAR | 193.33 | 193.33 | 192.28 | dn 01.44 | | APR | ---.-- | ---.-- | ---.-- | -- --.-- | | Estimated RB Volume day before 88,498 | | NYMEX NATURAL GAS dollars per mmBtu | | MONTH | HIGH | LOW | SETTLE | CHANGE | | SEP | 2.915 | 2.823 | 2.910 | up 0.028 | | OCT | 3.303 | 3.214 | 3.294 | up 0.006 | | NOV | 4.278 | 4.175 | 4.269 | up 0.008 | | DEC | 5.108 | 5.030 | 5.101 | up 0.008 | | | Estimated Volume…day before (133,928)
Nymex statistics are based on composite Access & Day Sessions
Prompt Gasoline NYH M5 -13.50 /-13.00 RBOB +3.50 /+4.00
US Gulf M4: -5.25 to -5.00 RBOB +3.25 to +3.50
L.A. Conv Reg 208.00-209.00, N-grade Group 184.25-185.25 Chi 185.70-185.95 | |
Market Review for Wednesday
INCE March, bulls have pointed at a stronger Dow Jones Industrial Average (DJIA) as a sign that the economy would improve, and they insisted that oil demand would improve along with it. Up until very recently, though, gains in demand have been extremely spotty, with a gain in gasoline demand almost certainly balanced by a decline in distillate demand or total products supplied. This changed with this weeks DOE report, which showed the four-week aggregate average of total products supplied down just 0.87%, or 169,000 bpd, which is remarkable, considering that they were down 1.258 million bpd and 6.44% just seven weeks ago, with the first report released in July. That is an extraordinary rebound for the whole, over this summer. That, of course, was the bullish news. Demand aggregates are still almost uniformly lower than a year ago, with some stubbornly low – like distillate. And, where gasoline demand aggregates had been higher at the start of summer, with the report for the beginning of July showing four-week gasoline consumption up 1.32%, they are now down 0.26%. Four-week distillate demand that week was down a crippling 12.30% against 2008, so that has improved (see page 6).
| Fuel for Thought The Commerce Department yesterday reported new home sales up for the fourth consecutive month in July, bolstering the case that the housing segment of the US economy is recovering more quickly than expected. Sales of single-family homes were up 9.6%, to a seasonally-adjusted rate of 433,000 units. It was the largest number since September, 2008, almost a year ago, and dwarfed the commonly-accepted expectation for a gain of 1.6% to 390,000 units. It was the fifth increase in seven months, Dow Jones noted, and homes sales now appear to have touched their low in January, six months earlier. This follows the Case-Shiller index, which showed home prices up in the second quarter for the first time in three years. Dow Jones also noted that the supply of homes is now at a 16-year low point. |
So, demand is, in fact, starting to claw its way back – relatively speaking. One of the facts of life in any set of statistics is that good news or bad news that lasts for a year or more eventually has to compare one set of high or low figures against their earlier incarnations. That is what seems to be happening now. A year ago, Wall Street was on the brink of a melt-down. Lehman Brothers filed for bankruptcy on September 15th a year ago. And that means that the figures we are getting now (and over the next two or three months) will be compared to some awfully poor numbers from a year ago. That’s not really a disclaimer; for a long time, we were comparing figures against strong numbers from our own past. This was an inevitable destination for comparisons.
Curiously, though, it did not matter yesterday. Crude oil inventories posted an unexpected gain and, even though it was very small, traders saw it as a bearish statistic. The year-on-year surplus dropped from 45.3 million barrels (15.19%) to 43.9 mln bbls (14.64%), but that did not trigger buying. Refined products stocks increased their year-on-year surpluses, with gasoline going from a surplus of 7.7 mln bbls (3.81%) to 8.5 mln bbls (4.26%). Distillate stocks increased their year-on-year surplus from 29.8 mln bbls (22.61%) to 30.2 mln bbls (22.84%). We are not running out of oil any time, soon.
Technicals
Crude oil prices were lower yesterday, but not by enough to give one any sense that we have a major decline coming. Heating oil is in a range between 178.40 and 197.38, and gasoline is in a range between 188.65 and 208.55, with additional resistance at 211.24. Any move beyond their existing ranges would give prices a sense of direction.
Cents per gallon
Above: Gasoline prices are at the heart of the issue of where the complex goes next. The bulls need a breakout or prices will fail & fall.
October crude oil now has buy-stops over $72.65, $75.00, $76.25, $79.17, $84.83, $85.13, $89.82, and $90.99. Sell-stops are under $70.65, $68.00-$68.05, $66.00-$66.11, $64.95, $62.70, $62.00-$62.09, $61.00, $60.00-$60.25, $59.65, $58.30, $56.55, and $56.15. September heating oil has buy-stops over 187.00, 192.83, 193.85, 194.65, 196.21, 197.40, 199.20, 209.40, 215.00, 221.13, 225.80, 227.05, 229.08, and 242.00. Sell stops are under 181.65, 179.25, 178.40, 171.65, 165.80, 163.75, 157.45, 155.85, 151.65, 148.70, 147.70, 141.30, 140.90, 137.50, 132.00, and 129.50. September RBOB has buy-stops over 202.25, 206.25, 208.55, 211.24, 214.00, 222.70, 228.86, 240.10, 250.40, 252.00, 265.10, 267.85, 270.85, 272.00, and 280.25. Sell-stops are under 197.30, 196.20, 191.50, 188.65, 184.50, 182.60, 176.75, 175.00-175.15, 169.70, 168.00, 165.25, and 160.10.
Football: The bulls lost six yards on third and 28, making it a difficult – but not impossible – fourth and 34 to go, today.
Technical Support & Resistance
Oct crude oil Support: $70.65-$70.80, $68.00-$68.05, $66.00-$66.15, $64.95-$65.23, $62.70-$62.85.
Resistance: $72.50-$72.65, $74.60-$75.00, $76.10-$76.25, $79.00-$79.17, $84.70-$84.83.
Sep heating oil Support: 181.65-181.80, 179.25-179.40, 178.40-178.55, 171.65-171.80, 165.80-166.00.
Resistance: 186.90-187.00, 192.70-192.85, 193.70-193.85, 194.50-194.65, 196.10-196.21.
Sep Rbob Support: 197.30-197.45, 196.20-196.40, 191.50-191.70, 188.65-188.80, 184.50-184.70.
Resistance: 202.10-202.25, 206.10-206.25, 206.60-206.76, 207.00-207.20, 207.75-207.85.
Oil Inventory Reports
This week’s biggest development was that total refined products supplied (total demand) are now just 0.87% below a year ago. Last week, they were 2.21% lower, two weeks ago, they were 3.03% lower and four weeks ago, they were 4.11% lower, using four-week aggregate averages. Four-week gasoline demand is now 0.26% lower, and four-week distillate use is 7.93% lower. We can’t point to a specific area that has gotten better, but apparently the whole is greater than the sum of its parts. This was this week’s big improvement. Year-on-year inventory surpluses were not far away from where they were last week.
Distillate stocks are now 30.2 million bbls, or 22.84%, higher than a year ago. Heating oil inventories are 12.9 mln bbls, or 36.24%, higher than they were a year ago. Gasoline stocks are 8.5 mln bbls (up 4.26%) higher against a year ago. Crude oil stocks are now 43.9 million bbls, or 14.64%, higher than a year ago. Residual stocks are 3.6 mln bbls (9.47%) lower than a year ago, jet fuel stocks are 4.4 mln bbls, (10.71%) higher than a year ago. Utilization is 3.20% lower than a year ago and 8.34% below the eight-year average. It is 9.70% lower than the five-year, pre-Katrina average.
DOE Weekly Inventory Statistics
| Category | Final DOE Estimate
This Week’s Estimate | History
Last Year’s Report | Most Recent Changes
This Week’s DOE Report | Versus A Year Ago
Millions of Barrels |
| Distillate | up 0.50 to 1.00 mln bbls | up 0.057 | dn 0.767 mln bbls | up 30.200 |
| Gasoline | dn 2.00 to 2.50 | dn 1.180 | dn 1.700 | up 8.500 |
| Crude oil | dn 2.50 to 3.50 | dn 0.177 | up 0.128 | up 43.900 |
| Utilization | up 0.1% to 0.6% | up 1.6% at 87.3% | up 0.1% at 84.1% | |
| Crude Imports | up 0.250 to 0.750 mmbd | dn 1.016 to 9.979 | up 1.112 to 9.225 mln bpd | |
| DOE Distillate Demand | 3.412 mln bpd | dn 054,000 | Gasoline Demand | 9.105 mln bpd | dn 100,000 |
| DOE Distillate Production | 4.001 mln bpd | dn 018,000 | Gasoline Production | 9.019 mln bpd | up 120,000 |
| DOE Distillate Imports | 0.132 mln bpd | dn 047,000 | Gasoline Imports | 1.102 mln bpd | up 160,000 |
Source: US Department of Energy’s Energy Information Administration
Open Interest Analysis
Crude oil open interest rose by 2,436 contracts on Tuesday, when prices were lower. That looks like fresh selling and is bearish.
Heating oil open interest fell by 3,121 contracts on Tuesday, when prices were lower. That looks like long liquidation, which would be supportive.
RBOB open interest fell by 4,466 contracts on Tuesday when prices were lower. That looks like long liquidation and is supportive. It suggests profit-taking.
Natural gas open interest fell by 2,275 on Monday, when prices dropped. This looks like long liquidation, and is supportive.
Monday’s Open Interest Changes:
Crude 1,159,096 up 2,436 Heat 313,857 dn 3,121 RBOB 217,791 dn 4,466 Nat gas 728,176 dn 2,275
CFTC Commitments of Traders (for the period ended Tuesday, Aug 18th)
As of Aug 18th: Long Short:
Crude oil 208,367 185,669 -contracts held by speculators: 1.12 long
614,569 636,515 held by the trade
75,342 76,094 held by small specs and hedgers.
Spreads….dn 4,572 contracts The ratio went from 1.18-to-one long to 1.12-to-one over the latest week.
Large speculators liquidated 5,907 long contracts and covered 1,528 shorts over the week under review. Commercials added 20,039 new longs and added 2,207 shorts. Small specs and hedgers liquidated 8,773 longs and added 4,680 shorts. Open interest rose by 787 contracts as prices dropped $0.26/barrel. That looks like net, new selling, but there was heavy long liquidation, new buying and short-selling all mixed into this week’s statistics. Small traders were the best new sellers.
The average large speculator has 2,126 long contracts (98 accounts), or 66 more contracts on average on 6 less accounts, and 2,040 shorts (91 accounts), or an average of 112 contracts less on 4 more accounts. Commercials held 7,146 longs (86) or 233 more longs on average on the same accounts, and 6,630 shorts (96), or 340 less shorts on 5 more accounts. Reportables held 4,021 longs (273, dn 4 accts) and 4,285 shorts (256 accts, up 4). There were 4 less long and 4 more short accounts.
Heating oil 52,074 16,338 - contracts held by speculators: 3.19 to 1 long
183,826 231,463 held by the trade.
38,855 26,954 held by small specs and hedgers.
Spreads….dn 1,631 contracts. The ratio of large speculative longs to shorts went from 3.61-to-one to 3.19-to-one in 1 week.
Large speculators liquidated 15 longs and added 1,922 shorts. Commercial accounts added 7,920 longs and added 5,062 shorts. Small speculators and hedgers liquidated 431 longs and added 490 shorts. Open interest grew by 5,843 contracts as prices dropped 4.67 cents. That looks like net new selling and is supportive. All three categories were selling, but the best selling came from commercials. Commercials were also the only new buyers.
The average large speculative long is holding 1,270 contracts (dn 358 lots on 41 accounts, up 9 accts), while the average short has 778 contracts (up 151 lots on 21 accts, dn 1). The average commercial long is holding 2,744 contracts (up 38 contracts on 67 accts, up 2) compared to the average short holding of 3,215 contracts (dn 66 lots on 72 accts, up 3). The average reportable position is 2,165 long (dn 20 lots on 126 accts, up 4) while the average short holding is 2,315 (dn 33 lots on 123 accts, up 4). Four new long and four new short accounts were opened over the week under review.
Rbob Gasoline 65,496 14,141 -contracts held by speculators: 4.63 to 1 long
124,799 181,115 held by the trade.
15,520 10,559 held by small specs and hedgers.
Spreads…dn 187 contracts The ratio of large speculative longs to shorts went from 8.17-to-one to 4.63-to-one in 2 weeks.
Large speculative holdings fell by 3,174 longs and grew by 4,752 shorts over the latest week. Commercial holdings grew by 12,247 longs and grew by 2,683 shorts. Small speculators and hedgers’ positions fell by 1,229 longs and grew by 409 shorts. Open interest grew by 7,657 contracts as prices dropped 4.20 cents, which looks like new selling and would be bearish. The ratio of longs to shorts dropped, on the new selling. There was new buying by commercials, but speculators kicked out longs and added new shorts. The best selling came from large speculators.
The average holdings are 1,149 contracts for each large speculative long (57) and 643 for each large speculative short (22). The average commercial long now has 1,733 contracts long (72) and 2,058 short (88). Average reportable holdings are 1,375 long (151) against 1,564 short (136). There was one more reportable long account and three more short accounts, increasing average longs by 50 contracts and increasing average shorts by 86 contracts.
Naturalgas 93,346 268,673 -contracts held by speculators: 2.88 to 1 short
322,981 196,084 held by the trade.
93,464 45,034 held by small specs and hedgers.
Spreads…dn 10,331 contracts The ratio of large speculative shorts to longs went from 2.62-to-one to 2.88-to-one in 1 week.
Large speculative holdings dropped by 1,457 longs and were up by 19,850 shorts over the latest week. Commercial accounts added 28,811 longs, and added 8,376 shorts, while small speculators and hedgers added 6,074 new longs and added 5,202 shorts. Open interest rose by 23,097 contracts as prices fell 44.5 cents. That looks like net, new selling, and is bearish. All three categories were selling, but large speculators sold the most. This was even more substantial than it at first appears, because 10,331 spreads were removed. Commercials were big buyers.
The average large speculator has 1,061 contracts (88) while each large speculative short is holding 2,952 shorts (91). The average commercial long now has 3,712 contracts long (87) and 2,971 short (66). Average reportable holdings are 2,715 long (244) long and 3,307 short (215). Large speculators added six new accounts, which diluted the average long holding by 95 contracts. They closed one short account, which increased the average short holding by 248 contracts. There were 11 new reportable long positions, which cut the average holding by 56, and four new short accounts, which added 22 to the average.
Natural Gas & Utility Generation
Natural gas futures were up almost three cents per million Btu yesterday on what is being described again as bargain-hunting and short-covering. There should be plenty of it, with prices at their lowest levels since the summer of 2002. And, with a large open short speculative interest, one has to expect to see potentially even massive short-covering at some figure.
We feel that both bargain-hunting (new buying by commercial end-users) and short-covering (by large speculative shorts) should occur on a large scale in a market that has every reason to expect higher demand next year, as the economic recovery gains momentum. While oil prices have discounted the impact on demand of an economic recovery regularly since March, natural gas prices have rarely put two days higher back to back, based on an anticipated recovery.
And that is not the only potentially bullish factor not to have been discounted yet. A full year of mostly declining rig counts has not yet generated any serious or sustained buying. At some point, traders have to take a look at a future in which lower production combines with renewed economic growth (and higher demand) to give us a tighter supply-demand balance.
There should come a point when traders stop looking almost exclusively at the overhang of gas in underground storage. This has already come months ago in heating oil, which has similar figures. Distillate stocks are 22.84% higher than a year ago, with heating oil inventories a whopping 36.24% higher. Natural gas stocks are now 21.27% higher than a year ago. We understand the more domestic nature of the US natural gas market, but at some point, what is good for the goose should be good for the gander. Natural gas prices should be almost $2.00 higher, in our view, to discount the coming economic recovery.
In cash trading yesterday, Henry Hub prices were at $2.70-$2.83, down $0.08-$0.13 on the day (DJN). SoCal prices were at $2.70-$2.81, down $0.03-$0.08 on the day. El Paso Permian prices were up $0.02 and down $0.02 at $2.63-$2.82. Katy prices were down $0.04-$0.05 at $2.72-$2.80. Waha prices were down $0.04-$0.08 at $2.68-$2.75. Transco 6 was down $0.19-$0.28 at $3.02-$3.09/mmBtu, according to Dow Jones News (DJN).
Palo Verde prices were last quoted at $31.50-$35.50/mwh. Northeastern prices last traded at $26.50-$37.30. Entergy was last at $26.00-$29.00. Ercot was last at $33.00-$33.50/mwh.
Dow Jones is basing its estimate for a build of 52 bcf (in this morning’s EIA underground natural gas storage report) on the average of estimates in its weekly survey. Bloomberg, using the same methodology, is looking for an average build of 53 bcf, with a range of builds between 45 and 59 bcf. Last year, there was a build of 100 bcf, using same dates, or 102 bcf, using the corresponding Friday.
Support is at $2.81-$2.82, $2.72-$2.77, $2.64-$2.66, $242-$2.45, $2.35-$2.36, $2.21-$2.24, $2.14-$2.16 and $2.05-$2.07. Resistance is at $2.91-$2.92, $2.97-$3.01, $3.16-$3.17, $3.22-$3.23, $3.28-$3.30, $3.59-$3.61, $3.73-$3.77, $3.85-$3.86, $4.09-$4.11, $4.15-$4.16, $4.24-$4.28, $4.31-$4.33, $4.37-$4.42, $4.53-$4.56, $4.65-$4.69, $4.85-$4.88, $5.01-$5.03, $5.22-$5.24, & $5.55-$5.57.
Natural gas prices were fractionally higher yesterday.
Dollars per million Btu
Sep Natural Gas: Support: $2.81-$2.82, $2.72-$2.77, $2.64-$2.66, $2.42-$2.43, $2.35-$2.36, $2.21-$2.24.
Resistance: $2.97-$3.01, $3.16-$3.17, $3.22-$3.23, $3.28-$3.30, $3.40-$3.41, $3.59-$3.61.
EIA Weekly Storage Figures
Last week’s EIA report showed a build of 52 bcf on expectations for a build of 56-57 bcf. Stocks are now 562 bcf higher than a year ago, against a surplus of 592 bcf a week ago, a surplus of 580 bcf two weeks ago and a surplus of 571 bcf three weeks ago. Stocks are now 21.27% higher than a year ago. They are 513 bcf and 19.06% above the five-year average.
The five-year average for this week was a build of 67.40 bcf (Friday), the eight-year average was a build of 65.62 bcf. Last year, there was a build of 102 bcf (Friday). Expectations are for a build of 52-53 bcf, according to Dow Jones and Bloomberg.
EIA Report
| Region | 08-14-09 | 08-07-09 | Change | Last Year | 5 Yr Avg |
| Cons East | 1681 | 1635 | up 46 | 1530 | 1519 |
| Cons West | 449 | 444 | up 05 | 362 | 374 |
| Producing | 1074 | 1073 | up 01 | 750 | 799 |
| Total US | 3204 | 3152 | up 52 | 2642 | 2691 |
Bcf, or Billions of cubic feet. Source: Energy Information Administration, US Department of Energy
News & Views
| In trading on Nymex, October crude oil prices were down $0.2306 at $71.20/barrel at 8:30 AM EDT, this morning. September heating oil prices were down 1.34 cents to 1.8386/gallon. September RBOB prices were down 0.87 cents to $1.9739. September natural gas prices were down $0.048 to $2.862/mmBtu. The Commerce Department kept its forecast for second-quarter GDP unchanged at 1.0% lower, which seemed to be a little bit of cold water on expectations for a developing recovery, this morning. And unemployment figures showed the number of Americans filing new unemployment benefits claims fell in the week ended Saturday pretty much as expected. Also in the news, AAA estimates that 11.8% fewer Americans will take to the roads this coming Labor Day Weekend, showing increased sensitivity to higher prices. Libya’s oil minister expects Opec to maintain output targets at existing levels when the ministers meet on September 9th. These factors, blended together, left the bulls on the defensive. Traders were more interested in inventories than demand in this week’s DOE statistics. 
Crude oil prices were slightly lower yesterday, although they gained fractionally against refined products. We believe that crude’s downfall was its inability to pull products higher last week. | 
Heating oil prices dropped fractionally yesterday, and they are now in a curious range between 178.40 and 197.38. Prices will need to break one or the other of these figures, to find a fresh trend. API Report: This week’s API report showed a build of 4.347 mln bbls in crude oil stocks, a draw of 0.146 mln bbls in distillate stocks and a draw of 1.798 mln bbls in gasoline inventories. Utilization was down 0.9% to 82.3%. Implied demand came in at 9.854 mln bpd in gasoline (best this summer) and at 4.280 mln bpd in distillate. Crude oil imports were up 0.475 mln bpd to 9.351 mln bpd. DOE Demand: Four-week, total refined products demand came in at 19.185 million bpd, up 0.190 mln bbls on the week, and down 0.169 mln bpd and 0.87% against a year ago. Seven weeks ago, it was 1.258 mln bpd and 6.44% lower than a year ago. Four-week gasoline demand is at 9.115 mln bpd, down 0.26%, compared to up 0.82% four weeks ago. Four-week distillate demand is now at 3.376 mln bpd, down 7.93%, compared to down 9.14% a week ago. Four-week jet demand is now at 1.429 mln bpd, down 11.84%, compared to down 13.46% one week ago. Four-week residual fuel demand is at 0.499 mln bpd, down 11.05%, compared to down 20.70% one week ago. Propane use is down 0.89%, at 996,000 bpd, compared to down 22.97% five weeks ago. |
Oil traders seem to have taken more from inventories, year-on-year, which were slightly higher, mostly, than from the improvements seen in four-week demand aggregates.
An Illustrated Look at Energy Market Factors
A Look at Atlantic Tropical Weather
This latest disturbance will bring some kind of weather to the East Coast.
Tropical Weather (continued)
Tropical Storm Danny (longer, thinner, black arrow pointing at Danny) is poised to strike the East Coast.
There is another system that bears watching just off the West African Coast (shorter, thicker, red arrow).
If it gets named, it will be called, “Erika.”
Source: www.weather.com
A Look at Four-Week Demand Figures
We have noted above the improvements in four-week demand compared to specific weeks. This compares the major categories to one week ago. Aside from gasoline, demand has now actually posted some notable increases.
| Category | This Week | Last Week |
| Total | dn 0.87% | dn 2.21% |
| Gasoline | dn 0.26% | dn 0.03% |
| Distillate | dn 7.93% | dn 9.14% |
| Jet Fuel | dn 11.84% | dn 13.46% |
| Propane | dn 0.89% | dn 2.08% |
| Residual | dn 11.05% | dn 20.70% |
Source: DOE
Despite these gains, demand is still mostly lower than a year ago. At the same time, though, we could see total products supplied higher than a year ago once we get into September. This will be possible because we will be comparing weak numbers to weak numbers that are now a year old, but improvement has always been a relative event.
Heating oil is in a trading range between 178.40 and 197.38 and gasoline is in a range of 188.65 to 208.55, although if it breaks 208.55, there is the year's high at 211.24. They do not seem capable of breaking to the upside, yet, and crude oil found out this week that it cannot advance alone. Crude oil sounded the "Charge!" late last week, but found itself all alone when it looked back. It succeeded in breaking its 2009 high at $73.38, but when it printed $75.00 on Tuesday this week, traders realized that it had gotten too far ahead of itself - and too far ahead of refined products - to move any higher.
A Look at the US Dollar Versus the Euro
Dollar-Euro (dollar in euro cents): Three-Month Bar-Chart 
The US dollar rallied fairly well yesterday, which was bearish for oil prices. There is still support @ 68.50 euro cents (blue line) and resistance @ 71.50-71.75, 72.25 and @ 72.75. Upside breakouts would help push quotes higher, which would be bearish for oil prices. A break and finish beneath the blue line would be bearish for the dollar and bullish for oil prices.
Source: http://www.advfn.com/p.php?pid=forexqkchart&curcode1=USD&curcode2=EUR
A Look at the Dow Jones Industrial Average (djia)
Dow Jones Industrial Average: Six Month Chart
The DJIA broke out to new highs late last week. It was steady to fractionally higher, yesterday.
Source: http://www.google.com/finance?q=INDEXDJX:.DJI
A Look at Gasoline Supply & Demand
Thirteen-week demand is at 9.152 million bpd, down 2.28% against last year. Thirteen-week supply is at 10.039 mln bpd, down 0.89%. Thirteen-week implied demand is at 9.989 mln bpd, down 2.52%.
A Look at Distillate Supply & Demand
Thirteen-week demand is at 3.365 million bpd, down 19.04% against last year. Thirteen-week supply is at 4.169 mln bpd, down 11.25%. Thirteen-week implied demand is at 4.015 mln bpd, down 9.73%.
A Look at Refinery Utilization
Utilization is 3.20% lower than a year ago and 8.34% below the eight-year average. It is 9.70% lower than the five-year, pre-Katrina average.
A Look at Inventories
A Look at Imports
Crude oil imports remain extremely low.
Recommendations for Specific Market Segments
Heating Oil Distributors The story of the week, so far, is that refined products did not follow crude oil prices higher at the end of last week, and that set this week up for a contest of wills between crude and products. It took until Tuesday for crude oil to realize that it had charged ahead to new highs for 2009, but that refined products had failed to follow. Heating oil prices are in a range between 178.40 and 197.38. If we break one or the other, it should lead prices. The bearish possibility is that heating oil breaks and settles beneath 178.40. Were that to occur, we would expect to see this market enter an official “failure mode (to break higher). That would be likely to play on crude oil, where so many investors are long oil for all the wrong reasons. This market has a larger proportion of traders following supply and demand, the charts, seasonal factors, weather predictions and petropolitical factors. They could exact a measure of revenge by selling prices through support, which we feel would drag crude oil quotes lower. The picture is looking better for buyers this morning, and we would wait on buying product for next winter. Use capped-price programs this winter. Diesel Users We are flat, and are going to wait for the time being. NYH Ultra Low Sulfur Diesel.…189.45-189.70 plus 4.375 USG Ultra Low Sulfur Diesel.…186.50-186.75 minus 0.875 Jet/Kerosene Users & Airlines New York Harbor cash market differentials were 3.75 to 4.00 cents under June heating oil in NY Harbor and 2.75 to 2.50 cents under the screen in the US Gulf. Diesel & Gasoline Marketers We would remain hedged here. Gasoline Blenders & End-Users We are flat. We want to remain on the sidelines for now. Prompt NYH Fuel Ethanol…..172.00-174.00 Prompt USG Fuel Ethanol….161.00-163.00 Quotes from 8-26-09 Heating Oil End-Users We have not done anything here, yet, but are looking at puts, again. Speculators We are flat here. We are seeing signs that the downside could be the way to go in this complex. Refiners The 7:5+2 crack spread was at $10.27 yesterday. Crude Oil Producers Crude oil prices seem to be losing appeal. A break below the bottom support of their ranges could have products pull crude lower. | Prompt Jet Fuel Prices New York Harbor 188.95-189.20 US Gulf 184.75-185.00 Midwest (Group Three) 186.20-187.20 Midwest (Chicago) 189.50-190.50 Los Angeles 189.00-190.00 San Francisco 189.00-190.00 Portland, Oregon 189.00-190.00 Cents per gallon Propane Prices Mont Belvieu……….…..non-TET………$0.939500 Cents per gallon 
Gasoline prices were lower again yesterday, and they are now in a trading range between 188.65 and 208.55. And, if they do break over 208.55, they then have resistance at 211.24. A break and settle under 188.65 would be bearish.
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We are going to take tomorrow off as the second part of our summer vacation.
Our next report will be out Monday morning.