Prices for December 31st, 2009
| HEATING OIL cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | JAN | 213.80 | 210.11 | 211.88 | up 00.95 | | FEB | 214.10 | 211.35 | 211.56 | dn 00.46 | | MAR | 214.66 | 211.97 | 212.19 | dn 00.59 | | APR | 215.11 | 212.81 | 212.63 | dn 00.50 | | MAY | 215.56 | 212.90 | 213.19 | dn 00.41 | | JUN | 215.75 | 213.52 | 213.82 | dn 00.37 | | JUL | 217.09 | 215.02 | 215.29 | dn 00.46 | | AUG | 217.32 | 217.32 | 217.06 | dn 00.56 | | SEP | 219.35 | 219.35 | 219.39 | dn 00.57 | | OCT | 222.43 | 222.06 | 221.92 | dn 00.56 | | NOV | ---.-- | ---.-- | ---.-- | -- --.-- | | DEC | 228.75 | 226.35 | 226.60 | dn 00.59 | | Estimated Volume (day before) total all prev day 96,054 | | NYMEX CRUDE OIL dollars per barrel | | MONTH | HIGH | LOW | SETTLE | CHANGE | | FEB | 80.00 | 79.16 | 79.36 | up 00.08 | | MAR | 80.71 | 79.87 | 80.02 | dn 00.01 | | APR | 81.37 | 80.52 | 80.63 | dn 00.10 | | MAY | 81.90 | 81.03 | 81.11 | dn 00.18 | | JUN | 82.35 | 81.52 | 81.59 | dn 00.20 | | JUL | 82.80 | 82.05 | 82.10 | dn 00.21 | | | | | | | | | Estimated Volume… 282,711 Opec Basket…$76.19 up $1.36
Prompt #2 Oil NYH 88..-1.00 to -0.50, 74 Lo S…-0.25 to +0.25
US Gulf 88 grade…-4.50 to -4.25, 74 grade Lo S…-4.25 to -3.75 Group .........-5.25 to -4.25 Lo S.....-5.25 to -4.25
Chicago ......-10.00 to -9.00
cash quotes by Dow Jones | | | |
| NYMEX RBOB GASOLINE cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | JAN | 207.00 | 202.66 | 205.25 | up 01.19 | | FEB | 208.46 | 204.59 | 205.29 | dn 00.37 | | MAR | 210.00 | 206.57 | 207.16 | dn 00.22 | | APR | 220.60 | 217.59 | 218.09 | dn 00.05 | | MAY | 221.15 | 219.11 | 219.01 | dn 00.17 | | JUN | 222.00 | 219.79 | 219.69 | dn 00.33 | | JUL | 222.12 | 219.73 | 219.90 | dn 00.28 | | AUG | 221.88 | 221.01 | 219.64 | dn 00.30 | | Estimated RB Volume day before 66,994 | | NYMEX NATURAL GAS dollars per mmBtu | | MONTH | HIGH | LOW | SETTLE | CHANGE | | FEB | 5.873 | 5.505 | 5.572 | dn 0.137 | | MAR | 5.835 | 5.472 | 5.532 | dn 0.153 | | APR | 5.779 | 5.462 | 5.505 | dn 0.144 | | MAY | 5.794 | 5.486 | 5.545 | dn 0.133 | | | Estimated Volume…day before (106,190)
Nymex statistics are based on composite Access & Day Sessions
Prompt Gasoline NYH M5 -1.00 /-0.75 RBOB +5.00 /+5.50
US Gulf M4: -3.75 to -3.50 RBOB +2.75 to +3.00
L.A. Conv Reg 217.00-218.00, N-grade Group 200.50-201.00 Chi 201.25-202.25 | |
Market Review for Thursday & over the Holiday Weekend
HURSDAY was a peculiar day, with all three of the main oil complex contracts higher in their front months but lower in the second months and beyond. We have seen that type of configuration in one or two of these, but cannot recall having seen it in all three on the same day for a very long time. Even on the final trading day of the year, this complex was able to throw something new and different at us.
That kind of a close makes it difficult to interpret. Obviously, it tells a story of heavier demand nearby, but unless it becomes a pattern, it is hard to overplay that angle. The latest DOE figures showed demand improvements, but the numbers the DOE released last week for a year ago are nowhere near the figures we recorded a year ago when they came out. The DOE said last week that the four-week average for all products supplied was 19.090 million bpd, down 39,000 bpd from a year earlier (dn 0.20%) when it was 19,129 mln bpd. A year ago, we recorded a figure of 19.936 mln bpd, down 3.69% from 2007.
| Fuel for Thought The thin holiday trading has left the bears in this market against the ropes, with the bulls all wound up with a haymaker roundhouse blow ready to finish them off. The dollar and the Dow (DJIA) are selectively being used as bullish-only factors, and a strange revision of the demand figures reported a year ago has ensured a consistent improvement in consumption numbers that ought not to be seen as bullish in any absolute sense. Refineries are about to enter turnarounds at the lowest percentage of capacity in decades and tensions with Iran threaten to boil over into unknown reactions. The bulls have engineered the oil markets into a position to advance past last year’s highs, possibly this first week of 2010. Everywhere we look, the deck is stacked in their favor. |
The figures were also odd for gasoline, which the DOE said last week had come in at 9.024 mln bpd, up 1.12% from a year earlier. Last year, the figure the DOE listed was 9.041 mln bpd, down 2.25% from 2007. Distillate four-week demand was reported last week at 3.689 mln bpd, down just 2.82% from 2008. But our figure for the corresponding four-week period (shifted a couple of days) was 4.044 mln bpd, down 3.25% from 2007. Using the figure in our records, four-week distillate demand would now be down 8.78% instead of down 2.82%. Government figures are notoriously squishy, but we are not sure why there are such huge discrepancies in the numbers we wrote down a year ago and the figures they are giving us now for a year ago. The bottom line is that demand is improving, but is still a far cry from what it once was.
On a one-week basis, last week’s reported demand figures came in at 9.074 mln bpd in gasoline (vs 9.106 mln bpd a year ago) and at 3.656 mln bpd in distillate (vs 4.310 mln bpd a year ago). Production came in at 9.028 mln bpd in gasoline (vs 8.939 mln bpd a year ago) and at 3.710 mln bpd in distillate (vs 4.542 mln bpd a year ago). Refinery output was much lower in distillate and refineries are unlikely to start pumping much more until May, now.
Technicals
The oil complex was higher again last week, and crude oil prices are within fairly easy striking distance of the major resistance at $82.00. Heating oil prices broke over 212.89, although they did not settle above that level. They are, though, within a penny of that level, making it easy to get back above it. Gasoline is furthest from major resistance.
Dollars per barrel
Above: The first days of this new year will be critical in determining whether prices succeed or fail in breaking $82.00.
February crude oil now has buy-stops over $80.00, $80.33-$80.52, $81.06, $81.58, $82.00, $84.83, and $85.13. Sell-stops are under $79.00, $77.75, $76.00, $74.25, $72.70, $71.99, $71.20, $70.55, $69.30, $68.55, $68.00, $65.80-$66.20, and $64.95. February heating oil has buy-stops over 214.10, 216.07, 225.80, 227.05, 229.08, 238.95, 249.62, and 251.50. Sell stops are under 210.00, 203.85, 199.80, 195.00, 191.00, 190.00, 189.55, 188.70, 187.00, 186.50, 182.63, 177.00, 176.68, 173.75, 171.10, 170.35, 168.60, 167.65, and 166.90. February RBOB has buy-stops over 208.50, 209.53, 211.24, 214.00, 222.70, and 228.86. Sell-stops are under 202.65, 198.60, 194.55, 189.65, 185.00-185.15, 184.60, 182.40, 181.20, 179.20, 177.30, 175.14, 171.40, 170.25, and 168.85. Several important resistance levels were pierced last week.
Football: The bulls picked up one yard on first down, making it second and nine to go, today. Trends are higher, here.
Technical Support & Resistance
Feb crude oil Support: $79.00-$79.20, $77.75-$77.85, $76.00-$76.20, $74.25-$74.40, $72.70-$72.85.
Resistance: $79.80-$80.00, $80.30-$80.55, $80.95-$81.10, $81.50-$81.60, $81.95-$82.00.
Feb heating oil Support: 211.35-211.50, 209.30-209.45, 205.80-206.00, 203.85-203.95, 199.80-200.00.
Resistance: 212.00-212.12, 213.80-214.10, 215.90-216.10, 225.60-225.80, 226.95-227.05.
Feb Rbob Support: 204.55-204.65, 202.65-202.75, 198.60-198.70, 194.55-194.70, 189.65-189.80.
Resistance: 206.00-206.15, 206.90-207.00, 207.50-207.62, 208.35-208.46, 209.40-209.53.
Oil Inventory Reports
This week’s DOE report will give us our first real flavor of supply and demand in the new year, and the trend has been for stocks to decline and demand to grow. As we noted in the opening comments, the numbers do not correspond with what we wrote down a year ago, and that discrepancy makes the comparisons unnecessarily bullish. We are not sure what to make of it, but the bottom line is that we are soon going to enter four months of refinery maintenance, and that should tighten supplies. The potentially good news, though, is that there is plenty of spare refining capacity for once in this market.
Last Week’s Inventory Comparison: Distillate stocks are now 15.6 million bbls, or 10.86%, higher than a year ago. Heating oil inventories are 2.9 mln bbls, or 6.99%, higher than they were a year ago. Gasoline stocks are 4.7 mln bbls (up 2.22%) higher against a year ago. Crude oil stocks are now 1.1 million bbls, or 0.34%, higher than a year ago. Residual stocks are 0.6 mln bbls (1.64%) lower than a year ago, jet fuel stocks are 4.1 mln bbls, (10.82%) higher than a year ago. Utilization is 2.23% lower than a year ago and 10.19% below the eight-year average. It is 12.46% lower than the four-year, pre-Katrina average and 7.93% below the average of the four years since the big hurricanes (Katrina & Rita) in 2005.
Last Week’s Demand: Four-week, total refined products demand came in at 19.090 million bpd, up 0.185 mln bbls on the week, and down 0.039 mln bpd and 0.20% against a year ago. Eleven weeks ago, it was 0.900 mln bpd and 5.03% higher than a year ago. Four-week gasoline demand is at 9.024 mln bpd, up 1.12%, compared to up 6.23% 11 weeks ago. Four-week distillate demand is now at 3.689 mln bpd, down 2.82%, compared to down 14.80% seven weeks ago. Four-week jet demand is now at 1.454 mln bpd, up 3.71%, compared to up 0.14% three weeks ago and 1.61% four weeks ago. Four-week residual fuel demand is at 0.498 mln bpd, down 30.83%, compared to down 1.19% six weeks ago. Propane use is up 14.80%, at 1.513 mln bpd, compared to being up 17.63% five weeks ago.
Last Week’s API Report: Last week’s API report showed a build of 1.725 mln bbls in crude oil stocks, a draw of 3.460 mln bbls in distillate stocks and a draw of 1.395 mln bbls in gasoline inventories. Utilization was down 0.2% to 78.2%. Implied demand came in at 9.460 mln bpd in gasoline and at 4.375 mln bpd in distillate. Crude oil imports were down 1.650 mln bpd to 7.330 mln bpd, which was substantially different than the figures released by the DOE.
DOE Weekly Inventory Statistics
| Category | Final DOE Estimate
This Week’s Estimate | History
Last Year’s Report | Most Recent Changes
Last Week’s DOE Report | Versus A Year Ago
Millions of Barrels |
| Distillate | dn 2.35 to 2.85 mln bbls | up 1.790 | dn 2.055 mln bbls | up 15.600 |
| Gasoline | dn 0.25 to 0.75 | up 3.334 | dn 0.366 | up 4.700 |
| Crude oil | up 2.00 to 3.00 | up 6.682 | dn 1.538 | up 1.100 |
| Utilization | up 0.5% to 1.0% | up 2.1% at 84.6% | up 0.23% at 80.27% | |
| Crude Imports | up 0.500 to 1.000 mmbd | up 1.236 to 10.485 | up 0.320 to 8.027 mln bpd | |
| DOE Distillate Demand | 3.656 mln bpd | dn 332,000 | Gasoline Demand | 9.074 mln bpd | up 029,000 |
| DOE Distillate Production | 3.710 mln bpd | dn 096,000 | Gasoline Production | 9.028 mln bpd | up 065,000 |
| DOE Distillate Imports | 0.237 mln bpd | dn 098,000 | Gasoline Imports | 0.753 mln bpd | dn 095,000 |
Source: US Department of Energy’s Energy Information Administration
Open Interest Analysis
Crude oil open interest grew by 13,131 contracts on Wednesday, when prices were higher. That looks like new buying, which would be supportive.
Heating oil open interest fell by 8,104 contracts on Wednesday, when prices were higher. That looks like short-covering, ahead of the contract expiration, which was on Thursday. The shorts held on too long – for all the ‘right’ reasons.
RBOB open interest fell by 2,243 contracts on Wednesday when prices were higher. That looks like short-covering, ahead of the contract expiration, which was on Thursday.
Natural gas open interest rose by 3,655 on Wednesday, when prices were lower. That looks like fresh selling, which would be bearish. It is an unusual thing to see heading into the end of the year.
Wednesday’s Open Interest Changes:
Crude 1,198,339 up 13,131 Heat 306,792 dn 8,104 RBOB 232,937 dn 2,243 Nat gas 705,557 up 3,655
CFTC Commitments of Traders for Nymex (for the period ended Tuesday, Dec 22nd)
Crude oil prices gained $3.71/bbl over the latest reporting period, and the best buying came from producer short-covering. That group covered 8,642 contracts. It also liquidated 6,318 contracts on the long side. Managed money accounts added 2,223 new longs. Swap dealers bought the most on aggregate, covering 4,204 contracts and buying 724 new longs. Other reportable accounts liquidated 2,286 longs and sold 1,275 new shorts.
In heating oil futures, prices gained 4.53 cents a gallon, and the best buying came from the speculative community. Large speculators of various groupings bought 3,385 new longs and covered 4.113 shorts. Commercial accounts, including producers, bought 2,942 new longs, but sold 13,592 new shorts. Non-reportable accounts bought 1,609 and covered 1,543.
Gasoline prices were up 4.37 cents a gallon during the period under review. Swap dealers bought 1,249 new longs and covered 106 shorts. Producers added 4,006 new longs but also added 4,768 new shorts. Managed money accounts liquidated 1,556 longs and covered 415 shorts. Other reportable positions liquidated 108 longs and covered 297 shorts. Swap dealers seem to have been the most active buyers.
In natural gas, prices gained 19.3 cents during the period under review. Small trader short-covering was the motive force, with 14,198 contracts covered against 9,546 contracts liquidated. Commercial accounts covered 21,268 contracts and liquidated 18,767. Large speculators were getting short again, selling 12,205 and buying just 5,052 contracts.
Natural Gas & Utility Generation
Natural gas prices were lower on Thursday, as traders reacted to an EIA underground storage report that showed a second consecutive disappointing set of numbers. Prices had started the session moving higher, with shorts covering positions ahead of the report, which was expected to show a draw of 147 bcf. The covering stopped abruptly, though, once the report showed a pull of just 124 bcf. That was less than last year’s draw of 143 bcf, although it was still more than the five-year average draw of 85 bcf.
Last week’s activity leaves us with what looks like a kind of minor top. This comes fast on the heels of a breakout that confirmed an existing objective to more than $7.00/mmBtu. While Thursday’s activity looks bearish, any selloff is likely to be short-lived. Temperatures were brutally cold in the Northeast over this past weekend, with wind-chill values in single digits in the New York Metropolitan area. The National Weather Service (NWS) is predicting colder-than-normal readings into the middle of this month. More importantly, the trend towards colder readings has been cemented into place and will remain so.
The bears’ biggest ally so far – and this is likely to remain the case this new year – is the revolution that has taken place in drilling in shale formations. The technology has advanced so far that gas-bearing formations can be tapped much more efficiently than ever before. Gas ‘fields’ or pockets are exhausted more quickly and more thoroughly than in the past. The result is that there is more gas available than most had expected. And there are huge question marks ahead as we start to feel the effects of lower drilling activity.
The Baker-Hughes rig count increased by eight to 759 last week, but that leaves us with 40% fewer rigs in operation than a year ago. We are getting more gas, more rapidly, from each gas-bearing formation, but they are also being exhausted more quickly. This changes the supply part of the equation in ways that are only now starting to become apparent. We should get more from those rigs still in service, but if formations start to be exhausted before new drilling gets underway, we could be looking at much less gas available, just as demand starts to recover fully.
In cash trading Thursday, Henry Hub prices were at $5.67-$5.94, down $0.02-$0.03 on the day (DJN). SoCal prices were at $5.75-$6.03, up $0.07 and down $0.08 on the day. El Paso Permian prices were down $0.01-$0.08 at $5.55-$5.75. Katy prices were down $0.07-$0.19 to $5.45-$5.87. Waha prices were up $0.00-$0.09 at $5.60-$5.81. Transco 6 was up $1.15-$1.50 to $7.90-$8.30/mmBtu, according to Dow Jones News (DJN). Cash prices into the Northeast were very strong on Thursday. The bitter cold is expected to remain with us for the next two weeks and possibly longer.
Palo Verde prices were last quoted at $39.50-$45.50/mwh. Northeastern prices last traded at $41.00-$62.50. Entergy was last at $37.00-$40.50. Ercot was last at $41.75-$42.75/mwh.
Support is at $5.50-$5.52, $5.42-$5.45, $5.31-$5.33, $5.19-$5.21, $5.12-$5.14, $4.96-$4.99, $4.83-$4.85, $4.64-$4.66, $4.40-$4.43, $4.15-$4.17, $4.05-$4.08, $3.73-$3.75, $3.66-$3.68, $3.50-$3.53, $3.44-$3.46, $3.28-$3.32, $2.91-$2.93, $2.80-$2.82, $2.74-$2.75, $2.69-$2.70, $2.62-$2.64, and $240-$2.43. Resistance is at $5.87-$5.89, $5.99-$6.04, $6.15-$6.17, $6.34-$6.37, $6.65-$6.69, $6.90-$6.94, $7.01-$7.04, $7.28-$7.31, and $7.34-$7.36.
Jan Natural Gas: Support: $5.50-$5.52, $5.42-$5.45, $5.31-$5.33, $5.19-$5.21, $5.12-$5.14, $4.96-$4.99.
Resistance: $5.87-$5.89, $5.96-$6.01, $6.15-$6.17, $6.34-$6.37, $6.65-$6.69, $6.90-$6.94.
Natural gas prices sold off at the end of last week, we expect on profit-taking.
Dollars per million Btu
Natural gas prices have had a strong finish to 2009, and have objectives to just above $7.00/mmBtu.
Dollars per million Btu
EIA Weekly Storage Figures
Last week’s EIA report showed a draw of 124 bcf on expectations for a draw of 147 bcf. Stocks are now 379 bcf higher than a year ago, against a surplus of 359 bcf a week ago, a surplus of 381 bcf two weeks ago and a surplus of 472 bcf three weeks ago. Stocks are now 13.08% higher than a year ago. They are 391 bcf and 13.55% above the five-year average.
For this week, the eight-year average (of similar Friday reports) was a draw of 87.88 bcf. The five-year average was a draw of 75.0 bcf. Last year, there was a draw of 47 bcf.
EIA Report
| Region | 12-25-09 | 12-18-09 | Change | Last Year | 5 Yr Avg |
| Cons East | 1779 | 1869 | dn 90 | 1603 | 1629 |
| Cons West | 453 | 464 | dn 11 | 403 | 388 |
| Producing | 1044 | 1067 | dn 23 | 891 | 868 |
| Total US | 3276 | 3400 | dn 124 | 2897 | 2885 |
Bcf, or Billions of cubic feet. Source: Energy Information Administration, US Department of Energy
News & Views
| In trading on Nymex, February crude oil prices were up $0.75 at $80.11/barrel at 1:30 AM EST, this morning. February heating oil prices were up 2.44 cents to 2.1400/gallon. February RBOB prices were up 2.51 cents to $2.0780. February natural gas prices were up $0.195 to $5.767/mmBtu. Asian traders were reportedly buying crude oil because of strength in natural gas, which came from bitterly cold temperatures across most of the country over the weekend. The cold will be with us through the middle of the month. Last year’s DOE report for the final week of the previous year and a couple days of the new year was a thoroughly bearish one. All three major inventory categories registered large increases, with crude gaining 6.682 million barrels, crude oil imports up more than 1.2 million bpd and refinery utilization up 2.1%. With the recent trend in inventories, utilization and imports, this week’s figures are likely to show almost completely opposite numbers, which would make for bullish changes in the year-on-year comparisons. 
Crude oil prices were higher last week, and they ended within fairly easy striking distance of the major resistance overhead at $82.00. The bulls ended the year on a strong note. | 
Heating oil prices advanced at the end of last week, and prices broke above both trendline resistance and the previous high of 212.89. Prices did not settle above that, but they are in a strong position, now. DOE History: Distillate stocks have grown in each of the last eight years, by an average of 3.674 mln bbls. The eight-year average is a build of 3.674 mln bbls. Gasoline stocks rose in seven of the last eight years, for a seven-year average build of 3.633 mln bbls and an eight-year average build of 3.154 mln bbls. Crude oil stocks have been lower in five of the last eight years for a five-year average draw of 3.880 mln bbls and it has an eight-year average draw of 1.390 mln bbls. Utilization has been higher in four of the last eight years and has an eight-year average increase of 0.39%, and it has an eight-year average utilization figure of 90.85%. The four-year, pre-hurricane utilization average was 92.40%. Since Katrina, refineries have run at an average utilization rate of 89.30%. Crude oil imports have been higher in three of the last six years, and the average crude oil import figure over the last six years has been up 124,000 bpd. The average crude oil import figure over the last six years has been 9.900 million bpd. |
| Crude oil prices seem determined to break $82.00 early this year. | |
The bulls have everything lined up in their favor. The two factors most responsible for higher prices in 2009 – a weak dollar and a strong stock market – have been turned into one-way factors only interpreted as being bullish on those days when the dollar drops or equities rise. The funds buying oil do not sell when the dollar rallies or equities fall. And the DOE is quoting figures from a year ago that are not near the numbers reported at the time, almost ensuring bullish comparisons.
An Illustrated Look at Energy Market Factors
A Look at the US Dollar Versus the Euro
Dollar-Euro (dollar in euro cents): Three-Month Bar-Chart 
The US dollar is in a consolidation, but the most disappointing fact is that the index funds and other ETF’s that take their cues on the buy side from any weakness at all in the dollar refuse to receive any bearish cues from a stronger dollar recently. It is bad enough having a non-oil factor so important in the oil markets; its one-way signals add insult to injury.
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 dropped 120.46 points on Thursday, but here, as well, only the bullish signals seem to work. Every time the DJIA makes new highs, it seems to come under assault from a wave of heavy profit-taking. This tendency has come more and more quickly on the heels of new highs recently, making the upside look extremely limited, unless this changes soon.
Source: http://money.cnn.com/quote/chart/chart.html?symb=djia&sid=1643&time=6mo&Submit1=Refresh
A Look at Gasoline Supply & Demand
Thirteen-week demand is at 9.026 million bpd, up 0.54% against last year. Thirteen-week supply is at 9.806 mln bpd, down 2.09%. Thirteen-week implied demand is at 9.792 mln bpd, up 0.92% against a year earlier.
A Look at Distillate Supply & Demand
Thirteen-week demand is at 3.609 million bpd, down 9.96% against last year. Thirteen-week supply is at 4.102 mln bpd, down 10.39%. Thirteen-week implied demand is at 4.214 mln bpd, down 4.98%.
A Look at Refinery Utilization
Utilization is 2.23% lower than a year ago and 10.19% below the eight-year average. It is 12.46% lower than the four-year, pre-Katrina average and 7.93% below the average of the four years since the big hurricanes (Katrina & Rita) in 2005.
A Look at Temperatures
Temperatures last night and over the weekend were brutally cold across most of the continent.
| 
| 
|
| | |
| 
| 
|
| Temperatures are expected to remain on the decidedly colder side through this week. |
Recommendations for Specific Market Segments
Heating Oil Distributors Heating oil prices broke to new highs on Thursday, settling at its highest level for 2009 on the final day of trading for the year. Prices could not finish above the previous high for the year at 212.89, the February contract begins its run as the expiring contract within easy striking distance of that figure. The way things are going, we have every reason to expect that to occur earlier rather than later. Brutally cold temperatures were experienced in the Northeast over the weekend and heating-degree day accumulations alone could push quotes higher. Demand is improving, at least in the rejiggered numbers released by the DOE. Refineries are running at levels normally seen after hurricanes in the US Gulf. Every tick lower in the dollar is called bullish while every tick higher is ignored. And there will be buy-stops on a close-only basis over 213 or 214. We would hold caps and add to them, where possible. Diesel Users We would hold capped-price protection, adding to it on dips. NYH Ultra Low Sulfur Diesel.…212.05-212.55 plus 0.750 USG Ultra Low Sulfur Diesel.…207.80-208.30 minus 4.000 Jet/Kerosene Users & Airlines New York Harbor cash market differentials were 1.75 to 2.00 cents over January heating oil in NY Harbor and 3.25 to 2.75 under the screen in the US Gulf. Diesel & Gasoline Marketers We want to be hedged against downside risk, despite the apparent bias to higher numbers. Gasoline Blenders & End-Users There is little around which the bears can mass themselves. The thin trading of the holidays gave the bulls the chance to build a rally. Prompt NYH Fuel Ethanol…..205.00-207.00 Prompt USG Fuel Ethanol….195.00-197.00 Quotes from 12-31-09 Heating Oil End-Users We would hold onto capped-price product, adding on dips. Speculators We expect the bulls to continue to push prices higher. Their reasons are not our own, nor can we happily embrace them, but they are going to take prices higher, we believe. Refiners The 7:5+2 crack spread was $7.64 Thursday. Crude Oil Producers Crude oil prices finished within a steep advance of the resistance at $82.00 and the first week of this new year will concern itself with the bulls’ certain attack upon that level. Success would lead to panic among the bears and send prices running higher. | Prompt Jet Fuel Prices New York Harbor 213.30-213.55 US Gulf 208.30-208.80 Midwest (Group Three) 213.35-214.35 Midwest (Chicago) 207.95-208.95 Los Angeles 215.00-216.00 San Francisco 215.00-216.00 Portland, Oregon 215.00-216.00 Cents per gallon Propane Prices Mont Belvieu……….…..non-TET………$1.242080 Cents per gallon  Gasoline prices advanced through the end of trading last week, and they settled above a trendline drawn from previous highs. They only have 211.24 left ahead of them, and they finished last week (last year) in a strong position to make a run at that level early this new year.
|
We wish all of our readers the very best for the year ahead.
~ Happy 2010! ~