Prices for January 14th, 2010
| HEATING OIL cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | FEB | 210.91 | 206.49 | 208.29 | dn 01.17 | | MAR | 211.80 | 207.60 | 209.21 | dn 01.28 | | APR | 212.15 | 208.27 | 209.76 | dn 01.16 | | MAY | 212.69 | 209.40 | 210.58 | dn 00.93 | | JUN | 213.55 | 210.21 | 211.63 | dn 00.72 | | JUL | 214.36 | 212.15 | 213.36 | dn 00.63 | | AUG | 215.60 | 213.98 | 215.26 | dn 00.58 | | SEP | 218.50 | 216.50 | 217.52 | dn 00.57 | | OCT | 220.66 | 219.80 | 220.09 | dn 00.50 | | NOV | 223.00 | 222.42 | 222.69 | dn 00.40 | | DEC | 226.62 | 223.90 | 225.27 | dn 00.32 | | JAN | ---.-- | ---.-- | ---.-- | -- --.-- | | Estimated Volume (day before) total all prev day 147,597 | | NYMEX CRUDE OIL dollars per barrel | | MONTH | HIGH | LOW | SETTLE | CHANGE | | FEB | 80.36 | 78.92 | 79.39 | dn 00.26 | | MAR | 80.75 | 79.32 | 79.88 | dn 00.16 | | APR | 81.32 | 79.90 | 80.47 | dn 00.13 | | MAY | 81.95 | 80.53 | 81.11 | dn 00.10 | | JUN | 82.51 | 81.09 | 81.73 | dn 00.07 | | JUL | 82.73 | 81.66 | 82.32 | dn 00.04 | | | | | | | | | Estimated Volume… 798,290 Opec Basket…$77.15 dn $1.93
Prompt #2 Oil NYH 88..-1.50 to -0.75, 74 Lo S…-1.00 to -0.50
US Gulf 88 grade…-4.50 to -4.25, 74 grade Lo S…-4.75 to -4.00 Group .........-6.00 to -5.50 Lo S.....-6.00 to -5.50
Chicago ......-12.00 to -11.00 cash quotes by Dow Jones | | | |
| NYMEX RBOB GASOLINE cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | FEB | 208.15 | 205.15 | 207.38 | up 01.36 | | MAR | 209.55 | 206.60 | 208.63 | up 01.09 | | APR | 219.56 | 216.95 | 218.37 | up 00.65 | | MAY | 220.47 | 217.97 | 219.27 | up 00.47 | | JUN | 221.11 | 218.76 | 219.81 | up 00.40 | | JUL | 220.22 | 219.20 | 219.72 | up 00.34 | | AUG | 220.14 | 218.88 | 219.26 | up.00.26 | | SEP | 219.54 | 218.30 | 218.38 | up 00.13 | | Estimated RB Volume day before 132,174 | | NYMEX NATURAL GAS dollars per mmBtu | | MONTH | HIGH | LOW | SETTLE | CHANGE | | FEB | 5.804 | 5.483 | 5.588 | dn 0.145 | | MAR | 5.769 | 5.458 | 5.570 | dn 0.134 | | APR | 5.720 | 5.435 | 5.540 | dn 0.128 | | MAY | 5.752 | 5.490 | 5.592 | dn 0.118 | | | Estimated Volume…day before (340,547)
Nymex statistics are based on composite Access & Day Sessions
Prompt Gasoline NYH M5 +0.00 /+0.50 RBOB +7.00 /+7.50
US Gulf M4: -2.75 to -2.50 RBOB +3.75 to +4.00
L.A. Conv Reg 196.00-197.00, N-grade Group 201.65-202.15 Chi 200.40-201.40 | |
Market Review for Thursday
S retail sales for December dropped by 0.3%, against expectations that they had actually increased by half a percentage point (0.5%). That means that this latest holiday retail season was worse than last year’s, which makes it the worst in a long time. Coming after a disappointing jobs report for December, this report raises fresh concerns for the economic recovery. As we have said here before, we think that 2010 will differ from 2009 insofar as higher commodities prices may now take their revenge on the economic recovery that theoretically fostered them. If consumers spent less at retail levels in December, it was almost certainly because they were spending more to heat their homes and to drive to work. Nothing happens without creating a reaction, and the rise in oil prices – spurred by signs that the economy was on its way towards recovery from March to December – seems to have wreaked its revenge by eating into the amount that consumers were able to spend buying gifts at the end of 2009. We fully expect that the actual numbers will balance out almost exactly.
| Fuel for Thought Right now, we have had a few economic signs that the economic recovery is faltering, and these signs have come just as the recovery in oil demand seems to have stepped backwards as well. As a result, prices have declined all week long. Of course, last week, one or two signs that the economy was on pace and a more bullish DOE report had given us new two-year (2009 % 2010) highs on only mild impetus.. A big part of the problem is the government’s gerrymandered statistics. The CPI is up 0.1% - even though refined products were more than double levels a year ago. And aggregate demand is only a little different, despite much higher figures released a year ago. Government figures neutralize otherwise large changes. |
If one compares the fourth quarter of 2009 with the fourth quarter of 2008, we can see that gasoline prices (on the Nymex) averaged 60 cents more a gallon, which comes out to just below $22 billion more. Heating oil prices averaged 15 cents a gallon more in the fourth quarter of 2009 than in 2008, and that pulled another $2 billion from consumers. We do not know how much less was spent by consumers at retail in December, 2009, but we expect that higher energy costs accounted for a large part of the missing spending.
We also have some questions about this week’s DOE four-week demand comparisons. We have gone back to the figures reported one year ago, in the DOE report released on January 14th. There are some serious discrepancies against the numbers reported now, for a year ago. Using the original figures, total products supplied (four-week averages) are 4.02% lower now. Gasoline’s four-week average is down 0.34%, very near what the DOE reported this week. Four-week distillate demand, though, is now 10.67% lower than the numbers released a year ago, instead of the 4.02% lower the DOE would have us believe now. We don’t know, but there is no real demand recovery in oil, yet.
Technicals
Gasoline prices consolidated and rallied yesterday, while heating oil had inside days, which suggest a degree of consolidation, there, as well. Prices are neither overbought nor oversold, here, but they have found support at their late December breakout points. We expect more movement sideways to higher, despite weak fundamentals.
Dollars per barrel
Above: Crude oil prices never really got dreadfully overbought, but they have since returned to neutral on their oscillators.
February crude oil now has buy-stops over $80.67, $82.35, $83.95, $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 $78.35, $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 210.91, 211.90, 217.55, 222.72, 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 206.00, 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, and 168.60. February RBOB has buy-stops over 208.30, 214.60, 219.27, 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 205.00-205.15, 202.10, 198.60, 194.55, 189.65, 185.00-185.15, 184.60, 182.40, 181.20, 179.20, 177.30, 175.14, 171.40, and 170.25.
Football: The bears gained three yards yesterday on first down, making it second and seven, here, today.
Technical Support & Resistance
Feb crude oil Support: $78.35-$78.50, $77.75-$77.85, $76.00-$76.20, $74.25-$74.40, $72.70-$72.85.
Resistance: $80.55-$80.67, $82.25-$82.35, $83.85-$83.95, $84.70-$84.85, $85.05-$85.15.
Feb heating oil Support: 206.00-206.20, 203.85-204.00, 199.80-200.00, 195.00-195.20, 191.00-191.20.
Resistance: 210.80-210.91, 211.75-211.90, 217.45-217.55, 222.60-222.72, 225.60-225.80.
Feb Rbob Support: 205.00-205.15, 202.10-202.25, 198.60-198.75, 194.55-194.70, 189.65-189.80.
Resistance: 208.10-208.30, 214.45-214.60, 219.10-219.30, 222.60-222.70, 228.75-228.86.
Oil Inventory Reports
This week’s DOE report showed builds in all three major inventory categories, even in distillate stocks. We have to expect to see a serious drawdown at some future point, as the heating oil burned in homes is replaced by material currently in secondary, and then ultimately in primary storage. Refinery utilization was up 1.4% and crude oil imports were up 540,000 bpd, suggesting a refinery maintenance rotation of units. It is still too early to be sure, but that’s the early take. Nevertheless, it is just a matter of time before last week’s cold weather takes some distillate out of this market.
This Week’s Inventory Comparison: Distillate stocks are now 15.0 million bbls, or 10.32%, higher than a year ago. Heating oil inventories are 1.5 mln bbls, or 3.70%, higher than they were a year ago. Gasoline stocks are 9.0 mln bbls (up 4.20%) higher against a year ago. Crude oil stocks are now 0.9 million bbls, or 0.27%, lower than a year ago. Residual stocks are 1.5 mln bbls (4.18%) higher than a year ago, jet fuel stocks are 3.9 mln bbls, (10.13%) higher than a year ago. Utilization is 3.90% lower than a year ago and 7.87% below the eight-year average. It is 10.37% lower than the four-year, pre-Katrina average and 5.37% below the average of the four years since the big hurricanes (Katrina & Rita) in 2005.
This Week’s Demand: Four-week, total refined products demand came in at 19.192 million bpd, down 0.234 mln bbls on the week, and down 0.180 mln bpd and 0.94% against a year ago. Thirteen weeks ago, it was 0.900 mln bpd and 5.03% higher than a year ago. Four-week gasoline demand is at 8.900 mln bpd, up 0.36%, compared to up 6.23% 13 weeks ago. Four-week distillate demand is now at 3.701 mln bpd, down 4.02%, compared to down 0.98% one week ago. Four-week jet demand is now at 1.430 mln bpd, up 3.17%, compared to up 8.17% one week ago. Four-week residual fuel demand is at 0.472 mln bpd, down 36.22%, compared to down 1.19% eight weeks ago. Propane use is up 13.31%, at 1.549 mln bpd, compared to being up 17.63% six weeks ago. Most figures were lower this week than last.
This Week’s API Report: This week’s API report showed a build of 1.206 mln bbls in crude oil stocks, a build of 3.595 mln bbls in distillate stocks and a build of 6.824 mln bbls in gasoline inventories. Utilization was up 0.3% to 79.8%. Implied demand came in at 8.097 mln bpd in gasoline and at 3.546 mln bpd in distillate. Crude oil imports were up 0.995 mln bpd to 9.729 mln bpd. This was an unexpectedly bearish report, especially with the huge builds in products.
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 | dn 2.35 to 2.85 mln bbls | up 6.346 | up 1.353 mln bbls | up 15.000 |
| Gasoline | dn 0.25 to 0.75 | up 2.068 | up 3.791 | up 9.000 |
| Crude oil | up 2.00 to 3.00 | up 1.144 | up 3.699 | dn 0.900 |
| Utilization | up 0.5% to 1.0% | up 0.6% at 85.2% | up 1.40% at 81.30% | |
| Crude Imports | up 0.500 to 1.000 mmbd | dn 0.756 to 9.729 | up 0.540 to 8.895 mln bpd | |
| DOE Distillate Demand | 3.614 mln bpd | up 068,000 | Gasoline Demand | 8.740 mln bpd | dn 001,000 |
| DOE Distillate Production | 3.855 mln bpd | up 046,000 | Gasoline Production | 8.511 mln bpd | dn 560,000 |
| DOE Distillate Imports | 0.537 mln bpd | up 248,000 | Gasoline Imports | 0.892 mln bpd | up 108,000 |
Source: US Department of Energy’s Energy Information Administration
Open Interest Analysis
Crude oil open interest rose by another 15,413 contracts on Wednesday, when prices were lower, giving us a net gain of 123,215 contracts so far this new year. Prices were lower on Wednesday, suggesting new selling, but we keep adding contracts.
Heating oil open interest fell by 6,009 contracts on Wednesday, when prices were lower. That looks like long liquidation and would be supportive. Open interest is up 19,607 contracts so far this year.
RBOB open interest rose by 3,851 contracts on Wednesday when prices were lower. That looks like new selling and would be bearish. So far, in 2010, 34,776 new contracts have been added.
Natural gas open interest fell by 1,137 on Wednesday, when prices were higher. Open interest is up 53,465 contracts so far this new year. That looks like short-covering, which would be bearish.
Wednesday’s Open Interest Changes:
Crude 1,316,280 up 15,413 Heat 326,399 dn 6,009 RBOB 269,430 up 3,851 Nat gas 759,022 dn 1,137
CFTC Commitments of Traders for Nymex (for the period ended Tuesday, Jan. 5th)
Crude oil prices gained $2.90/bbl over the latest reporting period, and the best buying came from producers, who added 5,721 new longs and covered 3,655 shorts. The other categories were net sellers, with swap dealers liquidating 166 longs and adding 5,828 shorts. Managed money liquidated 2,148 longs and added 1,906 shorts. Other reportables liquidated 890 longs and added 2,375 new shorts. These changes were unexpected; we expected more buying by funds, which may have come later.
In heating oil futures, prices gained 7.75 cents a gallon, and the best buying came from managed money accounts. They bought 9,302 new longs against only 1,443 new sales. Swap dealers were minor buyers, with 218 new purchases and 266 covered shorts. Producers liquidated 12,559 longs and covered 2,028 shorts, and other reportables liquidated 1,529 longs and added 514 new shorts. Funds were the ones pushing prices higher in heating oil futures.
Gasoline prices were up 9.60 cents a gallon during the period under review. Managed money added 15,583 new longs and only 118 new shorts. Producers liquidated 10,528 longs and added 6,298 new shorts. Swap dealers liquidated 712 longs and added 122 shorts, while other reportables liquidated 227 longs and added 280 new shorts. Funds pushed prices higher, here.
In natural gas, prices dropped 20.3 cents during the period under review. Large speculators sold 9,624 new contracts, with money managers selling 9,656 contracts. Swap dealers were the best buyers, adding 6,945 contracts, with assorted “other reportables” adding 841 contracts. The short position of money managers is a huge mystery, clearly being spread somewhere.
Natural Gas & Utility Generation
Natural gas prices were down 14.5 cents per million Btu yesterday as traders reacted to a drawdown of 266 bcf – eight bcf shy of the record 274 bcf pulled a year ago. It was more than the 254-256 bcf expected, but once it came out, traders realized that it was not large enough to power prices for an extended period. In some respects, the report had already been discounted over the previous two days. As a result, it was a case of buying the rumor and selling the fact, sort of. Traders discounted a bullish report, so when they got it there wasn’t much left to do.
Traders immediately realized that there is unlikely to be a repeat of this kind of report. Temperatures will have a hard time recreating the bitter cold extended across large chunks of the country, and if they do, it will be in February or later. As a result, we had selling after the initial reaction to the report. We do believe that once this reaction has played itself out, though, that traders will start to incorporate this week’s report into the larger picture. The year-to-year surplus has fallen from 10.08% to 3.75%, while the surplus against the five-year average has dropped from 11.25% to 4.43%. That’s almost a winter’s work in a week, and it changes the surplus pictures dramatically.
It will probably take part of today’s session to let traders assess the future weather forecasts, which are calling for moderate or above-average temperatures through most of the rest of the month. Any cold temperatures we do get are likely to be confined to a few states or a region, at least on the nearby horizon. In any event, no one is predicting a return to the bitter cold we had blanketing most of the country.
Without additional cold weather, it will be difficult for prices to get back above $6.00, at least over the near term. Nevertheless, it is going to be increasingly difficult to make serious inroads on the downside after eating away multiple percentage points from the year-on-year and five-year surpluses. Now that the surpluses have been cut so severely, we will only need a little cold here and there to get stocks back in line with previous years.
In cash trading yesterday, Henry Hub prices were at $5.72-$5.85, up $0.17-$0.19 on the day (DJN). SoCal prices were at $5.77-$5.89, up $0.10-$0.14 on the day. El Paso Permian prices were up $0.14-$0.18 at $5.59-$5.69. Katy prices were up $0.15-$0.20 to $5.64-$5.76. Waha prices were up $0.13-$0.20 at $5.62-$5.67. Transco 6 was up $0.00-$0.13 at $6.40-$6.60/mmBtu, according to Dow Jones News (DJN). Cash prices were higher yesterday as traders tried to push cash prices back into line with futures.
Palo Verde prices were last quoted at $47.25-$48.00/mwh. Northeastern prices last traded at $39.00-$53.75. Entergy was last at $33.50-$34.50. Ercot was last at $43.75-$43.80/mwh.
Support is at $5.42-$5.45, $5.35-$5.38, $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 $5.78-$5.81, $5.87-$5.90, $5.99-$6.03, $6.09-$6.11, $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: $5.42-$5.45, $5.35-$5.38, $5.31-$5.33, $5.19-$5.21, $5.12-$5.14, $4.96-$4.99..
Resistance: $5.78-$5.81, $5.87-$5.90, $5.99-$6.03, $6.09-$6.11, $6.15-$6.17, $6.34-$6.37.
Natural gas prices found support at their trendline on Tuesday but fell yesterday.
Dollars per million Btu
Natural gas prices are still in a longer-term uptrend. They seem to have found support at the trendline below.
Dollars per million Btu
EIA Weekly Storage Figures
This week’s EIA report showed a draw of 266 bcf on expectations for a draw of 254-256 bcf. Stocks are now 103 bcf higher than a year ago, against a surplus of 286 bcf a week ago, a surplus of 379 bcf two weeks ago and a surplus of 359 bcf three weeks ago. Stocks are now 3.75% higher than a year ago. They are 121 bcf and 4.43% above the five-year average.
For this week, the eight-year average (of similar Friday reports) was a draw of 103.0 bcf. The five-year average was a draw of 79.6 bcf. Last year’s draw was 94 bcf. Estimates suggested a draw of 254-256 bcf this week.
EIA Report
| Region | 01-08-10 | 01-01-09 | Change | Last Year | 5 Yr Avg |
| Cons East | 1532 | 1678 | dn 146 | 1478 | 1526 |
| Cons West | 414 | 434 | dn 20 | 372 | 361 |
| Producing | 906 | 1006 | dn 100 | 899 | 844 |
| Total US | 2852 | 3118 | dn 266 | 2749 | 2731 |
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 down $0.54 at $78.85/barrel at 8.30 AM EST, this morning. February heating oil prices were down 1.82 cents to 2.0647/gallon. February RBOB prices were down 0.50 cents to $2.0688. February natural gas prices were up $0.010 to $5.598/mmBtu. Prices were lower early this morning, despite higher equities prices in Asia. Traders seem to have come under a new synthesis of last week’s disappointing employment numbers, yesterday’s disappointing retail sales numbers and this week’s poor demand and higher inventories in oil. The overall picture was one of an economy mired in its attempts to recover and an oil market that is oversupplied and still struggling to rebuild demand. Still, we suspect that the bulls will return, at some point, and that investors will push prices higher again because the dollar is weaker or equities make new highs. It should not happen, but we still fear that it will. 
Crude oil prices were fractionally lower yesterday, but it was an inside day, and prices have a large amount of support below the market. | 
Heating oil prices had an inside trading day yesterday, and they remained above the trendline that they broke above at the end of December. This area should provide some support. The Consumer Price Index (CPI) was up 0.134% in December, the Labor Department reported this morning. The so-called “core” index, which excludes food and energy, was up 0.112%, with food and energy prices both increasing by 0.2% during the final month of 2009. Energy prices had risen at a 4.1% clip in November. Food prices were up 0.1% in November. Compared to December, 2008, the unadjusted CPI was up 2.7%, but that was largely because of a sharp decline in energy prices at the end of 2008. These numbers require a good deal of massaging, because wholesale gasoline and distillate prices were more than double what they had been a year earlier. This morning’s CPI figures are being seen as another sign of anemic growth, and the Federal Reserve has long stated that it plans on keeping interest rates low as long as unemployment is high and inflationary pressures are low. This morning’s numbers were considered to be on the low side, and were seen as further proof that rates will be kept where they are. |
| Crude oil prices still have support below the market. | |
The Nymex will be closed on Monday in observance of Dr Martin Luther King, Jr Day.
As a result, our next report will be out Tuesday morning.
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 was just about unchanged yesterday, and prices resisted breaking down to new lows. Prices have fallen to the downside of their recent consolidation, but they have since found support just above 68.60-68.70 euros.
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 made rallied 29.8 points yesterday, and equities could rally to make new highs at almost any point from here. Higher equities have typically been seen as being bullish for oil prices.
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 8.946 million bpd, down 0.49% against last year. Thirteen-week supply is at 9.782 mln bpd, down 1.26%. Thirteen-week implied demand is at 9.660 mln bpd, down 0.31% against a year earlier.
A Look at Distillate Supply & Demand
Thirteen-week demand is at 3.615 million bpd, down 9.88% against last year. Thirteen-week supply is at 4.117 mln bpd, down 11.95%. Thirteen-week implied demand is at 4.186 mln bpd, down 5.58%.
A Look at Refinery Utilization
Utilization is 3.90% lower than a year ago and 7.87% below the eight-year average. It is 10.37% lower than the four-year, pre-Katrina average and 5.37% below the average of the four years since the big hurricanes (Katrina & Rita) in 2005.
Recommendations for Specific Market Segments
Heating Oil Distributors Heating oil prices were lower again yesterday and again in trading overnight. We could see short-covering, though, before the weekend. This is a difficult market, because our hearts so badly want to see prices reflect the supply and demand. And that has been happening recently. A part of us wants to embrace this and expect it to continue. For the longest time, though, these interludes of clarity have proven fleeting, and these markets have easily fallen prey to the wilder imaginings of investors that see inflation or an imminent collapse in the US dollar as factors that can only be protected through long energy positions. And new highs in equities have created apparitions of imminent growth and recovery that have triggered similar buying frenzies in oil futures. While we would like to see the linkage between these disparate and ostensibly unrelated factors severed from the energy markets, we have no evidence that that has yet occurred. Add to this equation the possibility of a return to colder temperatures, and one has ample reason to hold capped-price protection against the myriad “what if’s” of a recently less logical trading environment. Hold your caps, here, just to be safe. Diesel Users We would hold and add to capped-price protection here today. NYH Ultra Low Sulfur Diesel.…207.30-207.80 minus 0.750 USG Ultra Low Sulfur Diesel.…204.30-204.80 minus 3.750 Jet/Kerosene Users & Airlines New York Harbor cash market differentials were 4.25 to 4.50 cents over January heating oil in NY Harbor and 0.25 under to 0.25 over the screen in the US Gulf. We still like locking in differentials. Diesel & Gasoline Marketers We would keep product hedged, because we just can’t tell where prices might next go. We do expect a rally at some point. Gasoline Blenders & End-Users This market has returned to the trendline that it broke to the upside at the end of 2009. It should offer some support. Prompt NYH Fuel Ethanol…..190.00-193.00 Prompt USG Fuel Ethanol….180.00-183.00 Quotes from 01-14-10 Heating Oil End-Users We would hold caps and would add to them here. Do not use anything other than caps or maybe calls. Futures are treacherous. Speculators We would hold onto long call positions, here. Refiners The 7:5+2 crack spread was $7.81 yesterday. Crude Oil Producers Crude oil prices were lower yesterday, although they still have support beneath the market. We had an inside day yesterday, which suggests a period here of stabilization coming. | Prompt Jet Fuel Prices New York Harbor 212.55-212.80 US Gulf 208.05-208.55 Midwest (Group Three) 208.30-209.30 Midwest (Chicago) 202.30-203.30 Los Angeles 210.00-211.00 San Francisco 210.00-211.00 Portland, Oregon 210.00-211.00 Cents per gallon Propane Prices Mont Belvieu……….…..non-TET………$1.191250 Cents per gallon  Gasoline prices rallied up from the trendline they touched on Wednesday, despite some of the poorest fundamentals we have seen. January, especially when it is colder than usual, is the quietest driving month in most years. Gasoline production fell by 560,000 bpd in the latest report, but demand came in at a paltry 8.740 million bpd, which is typical in January. This week’s increase in refinery utilization could increase output next week, although refiners are not trying to make extra gasoline now.
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