Prices for January 4th, 2009
| HEATING OIL cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | FEB | 219.65 | 213.00 | 219.05 | up 07.49 | | MAR | 219.90 | 213.74 | 219.26 | up 07.07 | | APR | 220.00 | 213.91 | 219.12 | up 06.49 | | MAY | 219.75 | 214.72 | 219.33 | up 06.14 | | JUN | 220.14 | 216.00 | 219.78 | up 05.96 | | JUL | 221.10 | 220.45 | 221.06 | up 05.77 | | AUG | 222.87 | 222.28 | 222.69 | up 05.63 | | SEP | 225.21 | 224.03 | 224.91 | up 05.52 | | OCT | 227.10 | 226.65 | 227.32 | up 05.40 | | NOV | 229.32 | 228.90 | 229.55 | up 05.28 | | DEC | 232.40 | 228.81 | 231.78 | up 05.18 | | JAN | 233.50 | 233.18 | 233.93 | up 05.13 | | Estimated Volume (day before) total all prev day 53,468 | | NYMEX CRUDE OIL dollars per barrel | | MONTH | HIGH | LOW | SETTLE | CHANGE | | FEB | 81.79 | 79.63 | 81.51 | up 02.15 | | MAR | 82.34 | 80.34 | 82.12 | up 02.10 | | APR | 82.77 | 81.05 | 82.65 | up 02.02 | | MAY | 83.22 | 81.11 | 83.12 | up 02.01 | | JUN | 83.62 | 82.01 | 83.56 | up 01.97 | | JUL | 84.01 | 82.90 | 84.02 | up 01.92 | | | | | | | | | Estimated Volume… 226,005 Opec Basket…$77.13 up $0.36
Prompt #2 Oil NYH 88..-0.00 to +0.25, 74 Lo S…-0.25 to +0.00
US Gulf 88 grade…-4.50 to -4.00, 74 grade Lo S…-4.50 to -4.00 Group .........-5.25 to -5.00 Lo S.....-5.25 to -5.00
Chicago ......-10.50 to -9.50
cash quotes by Dow Jones | | | |
| NYMEX RBOB GASOLINE cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | FEB | 211.42 | 206.71 | 210.44 | up 05.15 | | MAR | 212.86 | 208.45 | 212.01 | up 04.85 | | APR | 223.58 | 220.00 | 222.71 | up 04.62 | | MAY | 224.34 | 222.43 | 223.58 | up 04.57 | | JUN | 224.97 | 220.89 | 224.18 | up 04.49 | | JUL | 224.00 | 220.91 | 224.28 | up 04.38 | | AUG | 223.38 | 223.25 | 223.98 | up 04.34 | | SEP | 223.00 | 222.33 | 223.23 | up 04.34 | | Estimated RB Volume day before 61,519 | | NYMEX NATURAL GAS dollars per mmBtu | | MONTH | HIGH | LOW | SETTLE | CHANGE | | FEB | 5.894 | 5.705 | 5.884 | up 0.312 | | MAR | 5.852 | 5.677 | 5.841 | up 0.309 | | APR | 5.810 | 5.661 | 5.802 | up 0.297 | | MAY | 5.838 | 5.711 | 5.837 | up 0.292 | | | Estimated Volume…day before (136,469)
Nymex statistics are based on composite Access & Day Sessions
Prompt Gasoline NYH M5 -1.00 /-0.75 RBOB +5.50 /+6.50
US Gulf M4: -3.75 to -3.50 RBOB +2.50 to +2.75
L.A. Conv Reg 221.00-222.00, N-grade Group 205.45-205.95 Chi 206.75-207.25 | |
Market Review for Monday
IL prices started advancing in Asia on Sunday night (our time) and this continued into Monday morning. In one of the more unusual stories, wire services noted that Asian traders were buying oil because natural gas prices were so firm in the US, presumably on the bitterly cold weather that has most of the North American continent (north of the Rio Grande) locked in its icy embrace. It was a reason we had not seen attributed to Asian traders before.
To our way of thinking, that suggests that oil prices advanced primarily on bitterly cold temperature readings. That is a factor every oil trader can appreciate. Crude oil prices gained more than $2.00 and heating oil added another 7½ cents a gallon. Crude oil prices did not burst over $82.00, but they came awfully close. Gasoline printed a new high for the last year and a day, although it did not settle over 211.24, which was last year’s high. Heating oil blew away all the technical resistance, printing and finishing at higher levels than seen all last year. That is an ominous sign for the year ahead.
| Fuel for Thought Manufacturing Index values increased in the US, the UK and in China in December, and that helped equities as it underlined the sense that economic recovery will lift oil prices in 2010. The Institute for Supply Management’s manufacturing index in the US rose to 55.9 from 53.6 in November. The UK purchasing managers’ index rose to 54.1, and the manufacturing sector increased at its fastest rate in two years in December. And China’s HSBC purchasing managers’ index rose from 55.7 to 56.1 last month. Those numbers helped oil prices yesterday. Market observers also noted heavy ETF index fund buying in oil and commodities yesterday to begin a new year. The bulls seem to have everything lined up on their side of the ledger. |
The bulls did all the heavy lifting over the last two weeks, when trading was thin. In addition to the cold weather, prices were bolstered by a weaker US dollar and a huge rally in equities prices. And the cold weather was not restricted to the northern US; it extended across most of the continent, and was evident in Europe as well as in China. The world picked a heck-of-a moment to experiment with global cooling.
These factors, when working in unison, will be able to lift prices like they did yesterday, this month. They are coming just as we are about to enter four months of maintenance turnarounds. That should be bullish, although we have not entered January with this much spare capacity since the early 1980’s. In the past, utilization had to drop because there was no spare capacity. It is possible that we will maintain rates near existing levels this year as refineries are able to rotate units in and out of service. We just don’t know if they will, though.
Heating oil’s decisive breakout yesterday points it towards $2.34, according to the swing objective from $1.6585 to $2.1289 and then from $1.8703. Crude oil prices will have a swing objective to $85.54 if they break $82.00, and other objectives up to $99.00 may come into play.
Technicals
The bulls did their homework, and they have administered another lesson in the pitfalls of continuous trading. Heating oil prices broke the highs for all of 2009 on the first day of 2010. At some point, they may have to start giving actual holiday weeks off. While normal traders are with families, the ‘planners’ are actively preparing prices for moves.
Cents per gallon
Above: The first day of this new year has seen a new high and new high settlement for the period starting with January, 2009.
February crude oil now has buy-stops over $81.80, $82.00, $84.83, $85.13, $89.82, $90.99, $93.02, $96.03, $100.37, $102.85, $106.91, $108.11, $108.70, $109.60, and $110.45-$110.60. Sell-stops are under $79.60, $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 219.65, 225.80, 227.05, 229.08, 238.95, 249.62, 251.50, 256.48, 265.89, 273.20, 288.50, 295.00, 299.71, and 303.00. Sell stops are under 213.00, 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 211.24-211.42, 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 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.
Football: The bulls went to the air on second and nine, picking up 21 yards and a new set of downs. They look unstoppable.
Technical Support & Resistance
Feb crude oil Support: $79.60-$79.75, $79.00-$79.20, $77.75-$77.85, $76.00-$76.20, $74.25-$74.40.
Resistance: $81.70-$81.80, $81.95-$82.00, $84.70-$84.85, $85.05-$85.15, $89.70-$89.85.
Feb heating oil Support: 213.00-213.15, 211.35-211.50, 209.30-209.45, 205.80-206.00, 203.85-203.95.
Resistance: 219.50-219.65, 225.60-225.80, 226.95-227.05, 228.95-229.10, 238.85-238.95.
Feb Rbob Support: 206.70-206.80, 204.55-204.65, 202.65-202.75, 198.60-198.70, 194.55-194.70.
Resistance: 211.24-211.45, 213.80-214.00, 222.60-222.70, 228.75-228.86, 239.80-240.00.
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 soon going to enter four months of refinery maintenance, and the biggest question, which we will not be able to answer for four weeks or more, is if refineries will rotate units and keep utilization at already low levels or if they will cut to new, even lower levels.
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 fell by 5,274 contracts on Thursday, when prices were mixed to higher. That looks like short-covering, except that was just in February. There was selling in the outer months, showing commercial hedging.
Heating oil open interest fell by 3,229 contracts on Thursday, when prices were mixed to higher. That looks like short-covering, ahead of the contract expiration, which was on Thursday. The shorts were forced to buy January contracts.
RBOB open interest rose by 1,717 contracts on Thursday when prices were mixed to higher. That looks like new buying in the expiring January, suggesting someone wanted delivery and new selling in the back months.
Natural gas open interest rose by 1,997 on Thursday, when prices were lower. That looks like fresh selling, which would be bearish.
Thursday’s Open Interest Changes:
Crude 1,193,065 dn 5,274 Heat 303,563 dn 3,229 RBOB 234,654 up 1,717 Nat gas 707,554 up 1,997
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 shot higher yesterday as an Arctic octopus extended its frigid tentacles across most of the continental United States. From one broad river valley to the next, stretching from the Rocky Mountains and Grand Tetons eastward, the Arctic beast stretched its gripping embrace – an embrace that will spread and stretch further as we move through the week. So far, this has been a “heart of winter” that has lived up to its name, with the coldest and widest air mass in years or decades. And, it seems likely to remain in place for a sustained period of time, into the middle of the month or longer.
There is no disguising this market’s bread and butter – temperatures – specifically, brutally cold and bitter temperatures at that. After seeing heating oil prices eclipse their highs for all of 2009 on the first day of 2010, one can only imagine that gas traders are ready to exceed the highs for 2009, themselves, here before the week is over. And his sets us up for the battle of heavy shale formation output and a gargantuan round of consumption as factories, schools and businesses hunker down for a full, new year of activity in an economy that is reportedly recovering.
The last two EIA underground storage reports have illustrated the new technology that makes gas retrieval from previously difficult formations possible. This technology has revolutionized gas recovery, speeding it up in ways that still have some unforeseen ramifications we believe. We know that production has increased more than expected at the same time that it has relocated the focus of gas recovery from the US Gulf to areas once thought inhospitable or even inaccessible. The fact that we are at the start of a process that will develop more fully this year ensures surprises, as far as we are concerned. LNG facilities have also improved over the last year, and this once miniscule amount of supply (or potentially exports) will be more and more significant as we move deeper into 2010. It promises to be a year of rapid change, and prices are certain to reflect it all.
Right now, the major factor is weather, and that will remain the case through at least the middle of this month. Any extension of the time will be as important as any sudden end to it, although the trend is so clearly in place that we find a sudden warming unlikely. The next step is to see how the consumption works with supplies.
In cash trading yesterday, Henry Hub prices were at $5.96-$6.15, up $0.21-$0.29 on the day (DJN). SoCal prices were at $6.00-$6.10, up $0.07-$0.25 on the day. El Paso Permian prices were up $0.21-$0.22 at $5.77-$5.96. Katy prices were up $0.18-$0.48 to $5.93-$6.05. Waha prices were up $0.24-$0.35 at $5.95-$6.05. Transco 6 was up $4.60-$6.70 to $12.50-$15.00/mmBtu, according to Dow Jones News (DJN). Cash prices into the Northeast were very strong yesterday, reaching their highest levels this heating season, in front of a second Arctic air mass moving into the US tomorrow.
Palo Verde prices were last quoted at $49.00-$50.25/mwh. Northeastern prices last traded at $54.00-$100.50. Entergy was last at $60.00-$61.00. Ercot was last at $53.40-$54.50/mwh.
Support is at $5.70-$5.72, $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-$5.90, $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: $5.70-$5.72, $5.50-$5.52, $5.42-$5.45, $5.31-$5.33, $5.19-$5.21, $5.12-$5.14.
Resistance: $5.87-$5.90, $5.96-$6.01, $6.15-$6.17, $6.34-$6.37, $6.65-$6.69, $6.90-$6.94.
Natural gas prices rallied back after making a ‘bear trap’ on the break below $5.53. It looks like prices may be off to the races.
Dollars per million Btu
Natural gas prices are just a few cents away from printing a new high for the period of 2009 and 2010 (thus far, a day in).
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 $0.30 at $81.81/barrel at 2:30 AM EST, this morning. February heating oil prices were up 0.55 cents to 2.1960/gallon. February RBOB prices were up 1.03 cents to $2.1147. February natural gas prices were down $0.092 to $5.792/mmBtu. The $82.00 level is acting as a magnet, pulling prices higher to break above that level. Economic recovery and cold temperatures were the focal points of discussion in Asia early this morning. DOE Expectations The table below lists the first survey results for Dow Jones, Bloomberg and Reuters. The DOE report will be released at 10:30 AM EDT on Wednesday morning this week. Category Dow Jones Bloomberg Reuters Crude dn x.x00 dn 0.950 dn 0.000 mln bbls Distillate dn x.x00 dn 1.780 dn 1.900 Gasoline up 0.x00 up 0.800 up 0.400 Utilization up 0.x% up 0.5% up 0.4% 
Crude oil prices burst higher yesterday and they are now within easy striking distance of the major resistance at $82.00. Prices are overbought, but seem determined to break $82.00. | 
Heating oil prices have clearly broken out to the upside, and they now have objectives to $2.34/gallon. Cold weather is just the latest factor to push quotes higher. They broke the high for 2009 on the first day. 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 to want to break $82.00 early this year week. | |
It surely did not take long for oil prices to eclipse the highs seen in 2009, with heating oil taking one day. Gasoline and crude oil could take two. In 2003, it took crude oil two days to finish above the high for 2002, and in 2007 it took it two days to finish beneath the low of 2006. The big traders love to get their ducks in a row for easy shooting in the first week of the year. Unfortunately, those “ducks” are either end-users and consumers or producers. The former are in their sights now.
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 started out higher yesterday, but it sold off rather steeply as the session progressed. That weakness helped provide the bulls with another clip of ammunition on a day dominated by the bitterly cold weather. It almost does not matter here; the bulls only buy oil against signals generated here, and any weakness here gives us buying in oil.
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 gained more than 155 points yesterday, and it is just a hair’s breadth away from bursting to fresh highs. This strength also lent strength to the oil markets yesterday.
Source: http://money.cnn.com/quote/chart/chart.html?symb=djia&sid=1643&time=6mo&Submit1=Refresh
A Look at Inventories
A Look at Imports
Crude oil imports are in danger of falling off the bottom of our chart (we will rescale it).
A Look at Temperatures
Temperatures last night were bitterly cold across large parts of the continental US.
A second Arctic air blast will arrive tomorrow morning and last through Sunday.
| 
| 
|
| | |
| 
| 
|
| The Arctic air mass will flow all the way to our three coasts by later this week. |
| | |
| 
| 
|
| | |
Wind chill factors last night around 11 PM EST were adding to the bitter feel across most of the states in the Northern Plains, the Great Lakes and throughout the Mississippi River, Missouri River, Ohio River, Tennessee River, Connecticut River and Hudson River Valleys. It was also uncharacteristically cold at the Four Corners and at Lake Tahoe.
One only needs to look at these maps to grasp instantly the fact that the nation will be using more heating fuels, especially natural gas (for both outright space-heating and electrical generation) than has been the case in a number of years.
Recommendations for Specific Market Segments
Heating Oil Distributors Heating oil prices broke to new highs yesterday, breaking and finishing above the highest prices seen in 2009 on the first day of 2010. Granted, we are in the middle of the broadest, coldest and most sustained Arctic air situation in years or decades, but the fact that we were in position to make this move is all because of the ‘work’ done over the last two weeks, when markets were quiet and most people of good cheer were their families. Forgotten now are the days when prices rallied because the dollar gave back half a euro after having gained four. If this week does not give us a bullish DOE report, we should expect the next one will. As a result, this report is a “free report” for the bulls. If it is bullish, next week’s will be more so; if it is not, traders will forebear selling in anticipation of next week’s report. The deck is completely stacked in the bulls’ favor, right now. 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.…218.80-219.30 plus 0.000 USG Ultra Low Sulfur Diesel.…214.80-215.05 minus 4.125 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 The market is headed higher and we see little, other than long liquidation, capable of stopping it here. Prompt NYH Fuel Ethanol…..207.00-210.00 Prompt USG Fuel Ethanol….196.00-198.00 Quotes from 01-04-10 Heating Oil End-Users We would hold onto capped-price product, adding on dips. Speculators The market has everything lined up for higher prices. They seem certain to come, now. We would buy into any dip. Refiners The 7:5+2 crack spread was $7.91 Thursday. Crude Oil Producers Crude oil prices jumped higher yesterday, but they left for today the final assault on $82.00. We expect it will be broken this week and potentially as soon as today. The bulls did a great job of preparing the way for this advance - when the market was quiet. | Prompt Jet Fuel Prices New York Harbor 220.30-220.80 US Gulf 215.80-216.05 Midwest (Group Three) 220.55-221.55 Midwest (Chicago) 215.05-216.55 Los Angeles 223.00-224.00 San Francisco 223.00-224.00 Portland, Oregon 223.00-224.00 Cents per gallon Propane Prices Mont Belvieu……….…..non-TET………$1.376500 Cents per gallon  Gasoline prices broke higher, although they did not (yet) finish above the 2009 high of 211.24 (earlier to the left on this chart). A settle above that level would give us objectives higher to 230.67 and 236.14. The first objective is already in place and just needs the confirmation of a settle above 211.24.
|
We extend our heartfelt and earnest hope that all of our readers enjoy a
happy, healthy, safe and prosperous 2010!