Prices for February 12th, 2010
| HEATING OIL cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | MAR | 196.30 | 189.95 | 191.89 | dn 04.41 | | APR | 197.12 | 190.93 | 192.88 | dn 04.24 | | MAY | 197.97 | 192.00 | 193.97 | dn 04.00 | | JUN | 198.66 | 193.09 | 195.24 | dn 03.80 | | JUL | 200.22 | 195.40 | 197.38 | dn 03.54 | | AUG | 200.36 | 197.64 | 199.53 | dn 03.40 | | SEP | 204.60 | 199.18 | 201.80 | dn 03.29 | | OCT | 204.98 | 201.40 | 204.28 | dn 03.24 | | NOV | 207.39 | 204.70 | 206.68 | dn 03.21 | | DEC | 211.13 | 206.68 | 209.07 | dn 03.18 | | JAN | 212.08 | 210.44 | 211.50 | dn 03.14 | | FEB | 214.95 | 211.72 | 212.93 | dn 03.06 | | Estimated Volume (day before) total all prev day 93,802 | | NYMEX CRUDE OIL dollars per barrel | | MONTH | HIGH | LOW | SETTLE | CHANGE | | MAR | 75.35 | 72.66 | 74.13 | dn 01.15 | | APR | 75.76 | 73.09 | 74.50 | dn 01.22 | | MAY | 76.24 | 73.62 | 75.03 | dn 01.20 | | JUN | 76.53 | 74.22 | 75.57 | dn 01.16 | | JUL | 76.78 | 74.65 | 76.08 | dn 01.13 | | AUG | 77.23 | 75.62 | 76.54 | dn 01.09 | | | | | | | | | Estimated Volume… 904,485 Opec Basket…$71.81 up $1.03
Prompt #2 Oil NYH 88..-1.60 to -1.35, 74 Lo S…+0.75 to +1.25
US Gulf 88 grade…-4.50 to -4.00, 74 grade Lo S…-1.50 to -1.00 Group .........-5.50 to -5.00 Lo S.....-5.50 to -5.00
Chicago ......-5.50 to -4.50 cash quotes by Dow Jones | | | |
| NYMEX RBOB GASOLINE cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | MAR | 193.80 | 187.16 | 192.95 | dn 00.62 | | APR | 206.57 | 200.30 | 205.38 | dn 01.19 | | MAY | 207.00 | 201.95 | 206.70 | dn 01.37 | | JUN | 207.31 | 203.47 | 207.06 | dn 01.52 | | JUL | 206.41 | 203.24 | 206.66 | dn 01.68 | | AUG | 205.78 | 203.00 | 205.86 | dn 01.76 | | SEP | 203.24 | 201.42 | 204.87 | dn 01.86 | | OCT | 193.09 | 192.38 | 194.97 | dn 01.96 | | Estimated RB Volume day before 117,480 | | NYMEX NATURAL GAS dollars per mmBtu | | MONTH | HIGH | LOW | SETTLE | CHANGE | | MAR | 5.556 | 5.204 | 5.468 | up 0.072 | | APR | 5.527 | 5.191 | 5.447 | up 0.064 | | MAY | 5.568 | 5.250 | 5.495 | up 0.052 | | JUN | 5.630 | 5.344 | 5.564 | up 0.044 | | | Estimated Volume…day before (295,799)
Nymex statistics are based on composite Access & Day Sessions
Prompt Gasoline NYH M5 -1.25 /-1.00 RBOB +3.00 /+3.50
US Gulf M4: -4.50 to -4.25 RBOB +1.00 to +1.25
L.A. Conv Reg 195.00-196.00, N-grade Group 187.45-187.70 Chi 178.95-179.95 | |
Market Review for Friday & over the Holiday Weekend
URIOUSLY enough, the US is not the only country that had banks and markets closed yesterday. Many Asian markets, including those in China, Hong Kong, South Korea and Taiwan were closed for the Lunar New Year. They will be closed all week long. And it is Carnival in Brazil and some other South American countries. Markets will be closed there until Wednesday.
Last week, on Friday, oil prices were lower before traders in New York ever had a chance to see them. China once again raised reserve rates on its banks, and that, as it has a couple of times recently, pushed traders and investors away from risk. As a result, they bought US dollars and sold oil. The DJIA was down 45.05 points, which was not as severe as we have seen recently in reaction to this kind of news. It seems that markets are getting used to these moves [by China]. Nonetheless, they do still seem capable of generating reactions, even if they are as severe.
| Fuel for Thought Iran’s atomic energy chief, Ali Akbar Salehi, said yesterday that Iran is considering a new proposal from France, Russia and the US. Salehi was quoted saying that those three powers “presented a new proposal which we are in the process of considering. I am not going to unveil the contents of this proposal.” There is only one problem: France and the US say there has been no new proposal. The French foreign ministry said, “Mr Salehi ought to know the only offer is the one which was proposed by the IAEA in October … .” All three countries reiterated support for that proposal, which would have Iran ship its uranium out to be enriched in Russia and France and then returned in the form of fuel rods. |
Last week’s DOE report was hardly memorable. Distillate stocks, which had every opportunity to decline significantly, dropped by just 356,000 barrels. Crude oil and gasoline stocks were both higher. Distillate demand, which also could have increased from the very cold weather seen a week ago, came in at 3.696 million bpd, leaving the four-week demand 0f 3.726 million bpd, which was down 8.05% from a year ago. Bitterly cold weather has been able to generate single-week consumption figures of 4.5 million bpd in years gone by.
The most bullish factor in this market is the time of year. Seasonally, the best time of year to buy either gasoline or heating oil is in the first two weeks of March. We will have more on that this week. Prices have typically been higher by some point after March 15th and before mid-May. The middle of May is the most likely time of year for gasoline prices to peak. Crude oil and heating oil more often peak later in the year, with mid-October one of the most likely times.
This year, we are extremely worried about events in Iran. Israel has a closing window of opportunity to attack Iran’s nuclear facilities before sophisticated Russian anti-aircraft defenses are delivered to Iran.
Technicals
The bulls ended their perfect week on Friday, when prices finished lower across the oil complex. Gasoline prices had the smallest losses, but it took a fourth consecutive rally late in the session to achieve it. That is an odd pattern, and it suggests buying, late each day, by someone interested in getting strong closes. Once the position has been exited, though, prices have the potential to drop more severely. It is not a bullish pattern, despite the way it looks.
Cents per gallon
Above: Gasoline prices have rallied late in the session over each of the last four days.
March crude oil now has buy-stops over $75.70, $77.20, $78.05, $78.36, $79.31-$79.47, $80.67, $82.35, $83.95, $84.83, $85.13, $89.82, $90.99, $93.02, $96.03, and $100.37. Sell-stops are under $72.60, $71.30, $70.75, $69.30, $68.55, $68.00, $65.80-$66.20, and $64.95. March heating oil has buy-stops over 196.30, 197.70, 202.65, 203.75, 204.45, 205.75, 208.10, 210.91, 211.90, 217.55, 222.72, 225.80, 227.05, 229.08, 238.95, 249.62, and 251.50. Sell stops are under 189.95, 187.45, 186.50, 182.63, 177.00, 176.68, 173.75, 171.10, 170.35, and 168.60. March RBOB has buy-stops over 193.80, 194.90, 195.95-196.00, 203.75, 206.65, 206.88-207.35, 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 187.00, 184.15, 182.40, 181.20, 179.20, 177.30, 175.14, 171.40, and 170.25.
Football: The bulls took over on Friday and promptly lost 11 yards, making it second and 21 to go. This hasn’t worked lately.
Technical Support & Resistance
Mar crude oil Support: $73.35-$73.50, $72.60-$72.75, $71.15-$71.30, $70.55-$70.70, $69.30-$69.45.
Resistance: $75.60-$75.70, $77.05-$77.20, $77.95-$78.05, $78.25-$78.36, $79.31-$79.50.
Mar heating oil Support: 190.75-190.90, 189.95-190.15, 187.45-187.60, 186.50-186.65, 182.60-182.75.
Resistance: 196.15-196.30, 197.55-197.70, 202.50-202.62, 203.50-203.72, 204.35-204.45.
Mar Rbob Support: 188.90-189.00, 188.25-188.40, 187.00-187.15, 184.15-184.30, 182.40-182.55.
Resistance: 193.65-193.80, 194.65-194.90, 195.80-195.95, 203.60-203.75, 206.25-206.35.
Oil Inventory Reports
Last week’s DOE report came out on Friday and it did not show as large a build in crude oil stocks as the API report had shown, but it still showed a build there and in gasoline inventories. And distillate stocks had a disappointing drawdown of just 0.356 million barrels. For this coming week’s report, there have been eight straight years of distillate stock declines this week, averaging 3.062 million bbls. Utilization has been all over the place this week, with four years higher, three lower and one unchanged. Gasoline stocks have been higher in five years and crude has been higher in six years.
Last Week’s Inventory Comparison: Distillate stocks are now 12.4 million bbls, or 8.62%, higher than a year ago. Heating oil inventories are 6.0 mln bbls, or 16.00%, higher than they were a year ago. Gasoline stocks are 13.0 mln bbls (up 5.98%) higher against a year ago. Crude oil stocks are now 21.8 million bbls, or 6.17%, lower than a year ago. Residual stocks are 3.4 mln bbls (9.44%) higher than a year ago, jet fuel stocks are 1.6 mln bbls, (3.92%) higher than a year ago. Utilization is 2.50% lower than a year ago and 7.86% below the eight-year average. It is 9.98% lower than the four-year, pre-Katrina average and 5.75% 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 18.750 million bpd, up 0.156 mln bbls on the week, and down 0.159 mln bpd and 0.83% against a year ago. Five weeks ago, it was 0.050 mln bpd and 0.26% higher than a year ago. Four-week gasoline demand is at 8.650 mln bpd, down 0.67%, compared to up 0.32% five weeks ago. It gained 6,000 bpd on the week. Four-week distillate demand is now at 3.726 mln bpd, down 8.05%, compared to down 0.98% five weeks ago. Four-week jet demand is now at 1.372 mln bpd, up 1.25% against a year ago, compared to up 8.17% five weeks ago. Four-week residual fuel demand is at 0.543 mln bpd, down 19.19%, compared to down 34.14% one week ago. Propane use is up 13.06%, to 1.601 mln bpd. Gasoline supply increased by 465,000 bpd in last week’s report.
Last Week’s API Report: Last week’s API report showed a build of 7.195 mln bbls in crude oil stocks, a draw of 1.531 mln bbls in distillate stocks and a build of 1.552 mln bbls in gasoline inventories. Utilization was down 1.0% to 77.0%. Implied demand came in at a paltry 8.320 mln bpd in gasoline and at 3.957 mln bpd in distillate. Crude oil imports were down 0.096 mln bpd to 8.375 mln bpd. Gasoline demand was so low we checked our figures twice. Production was 8.274 mln bpd.
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 2.00 to 2.50 mln bbls | dn 1.066 | dn 0.356 mln bbls | up 12.400 |
| Gasoline | up 1.00 to 1.50 | dn 2.662 | up 2.324 | up 13.000 |
| Crude oil | up 1.25 to 2.25 | up 4.717 | up 2.424 | dn 21.800 |
| Utilization | up 0.3% to 0.8% | dn 1.9% at 81.6% | up 1.40% at 79.10% | |
| Crude Imports | dn 0.000 to 0.500 mmbd | dn 0.385 to 9.652 | dn 0.084 to 8.342 mln bpd | |
| DOE Distillate Demand | 3.696 mln bpd | up 037,000 | Gasoline Demand | 8.766 mln bpd | up 153,000 |
| DOE Distillate Production | 3.413 mln bpd | dn 071,000 | Gasoline Production | 8.807 mln bpd | up 223,000 |
| DOE Distillate Imports | 0.630 mln bpd | up 192,000 | Gasoline Imports | 1.168 mln bpd | up 242,000 |
Source: US Department of Energy’s Energy Information Administration
Open Interest Analysis
Crude oil open interest rose by 25,808 contracts on Thursday, when prices were higher. That looks like heavy, new buying and the funds seem to have been buying towards the end of last week, in sympathy with equities.
Heating oil open interest fell by 5,782 contracts on Thursday, when prices were higher. That looks like short-covering and is bearish.
RBOB open interest fell by 3,830 contracts on Thursday, when prices were higher. That looks like short-covering, in this case, which would be bearish.
Natural gas open interest grew by 6,060 on Thursday, when prices were higher. That looks like good, new buying and is supportive.
Thursday’s Open Interest Changes:
Crude 1,331,464 up 25,808 Heat 306,480 dn 5,782 RBOB 257,016 dn 3,830 Nat gas 774,511 up 6,060
CFTC Commitments of Traders for Nymex (for the period ended Tuesday, Feb 2nd)
Crude oil prices dropped $3.53/bbl over the latest reporting period, and the best selling came from the “other reportables” category, which liquidated 2,360 longs, but which also added 517 new shorts. Producers added 1,290 shorts and added 2,221 shorts. Managed Money added 1,220 longs and covered 2,931 shorts while Swap Dealers added 3,517 longs and covered 1,555 shorts. Producers actively sold short in this market, but they bought about half of what they sold. The “other” selling did it.
In heating oil futures, prices dropped 9.77 cents a gallon, and the best net selling came from Managed Money liquidation. That category liquidated 6,267 long contracts and sold 161 new shorts. Swap Dealers were the best buyers, adding 4,753 new longs against 189 new shorts. Producers bought 3,379 new longs and covered 1,147 shorts. Other Reportables liquidated 1,418 longs and covered 320 shorts.
Gasoline prices dropped 9.26 cents a gallon during the period under review. Managed Money accounts liquidated 8,639 longs and added 17 shorts, making it the best net seller. Swap Dealers liquidated 687 longs and covered 62 shorts. Producers bought into the weakness, adding 9,798 new longs, while adding 1,827 new shorts. The Other Reportable category bought 810 new longs and covered 1,357 shorts as prices dropped.
In natural gas, prices fell 17.2 cents during the period under review. Producers liquidated 78 longs and covered 1,364 shorts. Swap dealers liquidated 9,167 longs and covered 1,496 shorts. Other Reportables liquidated 286 longs and covered 3,136 shorts. Managed Money accounts added 682 longs and covered 4,999 shorts. Swap Dealer liquidation pushed quotes lower.
Natural Gas & Utility Generation
Natural gas prices were higher on Friday, primarily in response to last week’s EIA underground storage report. Last week’s report showed a drawdown of 191 bcf, against expectations for a drawdown of 180-183 bcf. Stocks are now 172 bcf and 8.42% higher than a year ago. They are 114 bcf and 5.43% above the five-year average. Last week, before the report, stocks were 199 bcf and 9.02% higher than a year ago and 150 bcf and 6.65% more than the five-year average. This represents improvement, and Friday’s activity suggests that traders expect more to follow with this week’s stats.
Prices had started Friday’s session under selling pressure, but they turned higher immediately after the release of the EIA underground storage figures. That reflected the fact that the report was better than expectations. But, it was only after traders had seen the changes in the surpluses (against a year ago and the five-year average) that the buying gained momentum.
The early selling had come on a forecast calling for a return to more normal temperatures as February ends. That makes today’s weather outlook all that much more compelling. If it shows the same prediction and builds on it, calling for a milder start to March, that could sap some strength just as traders are starting to see the possibility of erasing the surpluses that exist in the storage comparisons. Cold weather last week is likely to give us a decent drawdown in this coming week’s report, and that could give traders something to build on. The fact that it was cold as far south as Texas last week should give us a good draw.
As it stands now, this week’s report has every opportunity to alter the picture substantially. Last year, at this time (this coming report), there was a drawdown of just 24 bcf, giving this week a huge opportunity to cut into the 172 bcf year-on-year surplus. The five-year average was a draw of 126 bcf, according to our own past reports, and there is opportunity there, as well. It is too early to get a solid feel for estimates for this week’s numbers, but we would expect to see a build of at least 150 bcf, and it probably will be nearer 175 bcf. A number near the upper end of that range would eat significantly into the surplus against the five-year average.
In cash trading on Friday, Henry Hub prices were at $5.44-$5.65, up 0.01-$0.07 on the day (DJN). SoCal prices were at $5.43-$5.48, down $0.06-$0.08 on the day. El Paso Permian prices were up $0.02 and down $0.06 to $5.24-$5.40. Katy prices were down $0.04-$0.06 to $5.36-$5.45. Waha prices were down $0.00-$0.12 at $5.28-$5.45. Transco 6 was down $0.60-$0.98 to $6.27-$7.50/mmBtu, according to Dow Jones News (DJN).
Palo Verde prices were last quoted at $46.50-$47.50/mwh. Northeastern prices last traded at $54.75-$56.00. Entergy was last at $48.75-$49.25. Ercot was last at $45.75-$46.50/mwh.
Support is at $5.20-$5.25, $5.12-$5.14, $5.06-$5.08, $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, and $2.69-$2.70. Resistance is at $5.46-$5.47, $5.55-$5.60, $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.
Mar Natural Gas: Support: $5.20-$5.25, $5.12-$5.14, $5.06-$5.08, $4.96-$4.99, $4.83-$4.85, $4.64-$4.66.
Resistance: $5.46-$5.47, $5.55-$5.60, $5.71-$5.73, $5.87-$5.90, $5.99-$6.03, $6.09-$6.11.
Natural gas prices seem to have built a bottom, maybe even a small launching pad to higher levels.
Dollars per million Btu
The longer-term picture in natural gas shows a market trying to decide which way to move next.
Dollars per million Btu
EIA Weekly Storage Figures
Last week’s EIA report showed a draw of 191 bcf on expectations for a draw of 180-183 bcf. Stocks are now 172 bcf higher than a year ago, against a surplus of 199 bcf a week ago, a surplus of 120 bcf two weeks ago and a surplus of 22 bcf three weeks ago. Stocks are now 8.42% higher than a year ago. They are 114 bcf and 5.43% above the five-year average.
For this week, the eight-year average (of similar Friday reports) was a draw of 139.63 bcf. The five-year average was a draw of 126.0 bcf. Last year’s draw was only 24 bcf, which was the lowest figure in eight years. The most was 223 in 2007.
EIA Report
| Region | 02-05-10 | 01-29-10 | Change | Last Year | 5 Yr Avg |
| Cons East | 1135 | 1251 | dn 116 | 988 | 1134 |
| Cons West | 344 | 359 | dn 15 | 328 | 284 |
| Producing | 736 | 796 | dn 60 | 726 | 682 |
| Total US | 2215 | 2406 | dn 191 | 2043 | 2101 |
Bcf, or Billions of cubic feet. Source: Energy Information Administration, US Department of Energy
News & Views
| In trading on Nymex, March crude oil prices were down $0.01 at $74.12/barrel at 8.30 PM EST, last night. March heating oil prices were down 0.20 cents to 1.9169/gallon. March RBOB prices were down 0.72 cents to 1.9223. March natural gas prices were up $0.042 to $5.510/mmBtu. Prices were lower in thin trading as investors continued to worry about Chinese demand and European sovereign debt problems. Only Europe was open yesterday. We will have fuller details in the days ahead, but to make a long story short, buying June gasoline futures in the first two weeks of March has yielded profits before the middle of May in 24 out of 25 years, the most reliable seasonal tendency of any commodity. June heating oil, bought in the same first two weeks of March, has been able to be sold at a profit at some point before May 15th in 25 of the last 30 years. We come into this seasonal with extreme worries over the state of affairs with Iran’s nuclear program. At this point, there are too many bearish factors to buy futures, but we would look at calls. 
Crude oil prices dropped on Friday in reaction to China’s decision to increase its bank reserve rate, again. This brought in long liquidation and selling. | 
Heating oil prices dropped 4.41 cents on Friday, giving back a sizeable portion of the gains made during last week. Equities were lower, the dollar was higher, and the DOE report was disappointing. DOE History: Distillate stocks have fallen in all of the last eight years, by an average of 3.062 mln bbls. The eight-year average is a draw of 3.062 mln bbls. Gasoline stocks rose in five of the last eight years, for a five-year build of 0.940 mln bbls and an eight-year average draw of 0.037 mln bbls. Crude oil stocks have been higher in six of the last eight years for a six-year average build of 3.017 mln bbls and it has an eight-year average build of 1.850 mln bbls. Utilization has been higher in four of the last eight years (up 0.93%) and has an eight-year average decline of 0.1%, with an eight-year average utilization figure of 86.86%. The four-year, pre-hurricane utilization average was 89.32%. Since Katrina, refineries have run at an average utilization rate of 84.40%. 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 47,000 bpd. The average crude oil import figure over the last six years has been 9.731 million bpd. Imports were 1.389 million bpd below that average in last week’s report. That’s 14.27% lower, which indicates how much lower runs are now. |
| Crude prices sold off on a higher Chinese bank reserve rate. | |
The end of February can be a bad time to buy, but sometimes traders look to get a jump on the March seasonal by buying early. We are also extremely worried about the potential for events to spin out of control with Iran. We always knew it was the big wild card for 2010, but the fact that windows of opportunity will be closing soon moves our fear factor closer.
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 higher on Friday, and it finished at its highest level in a long time. This acted as a bearish factor for oil prices, and it could be the start of another leg higher in the dollar.
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 ended the day down 45.05 points on Friday. Equities were lower because of China’s decision to raise reserve rates on banks. This is seen as a move that could dampen [Chinese] growth – which appears to be the intention.
Source: http://money.cnn.com/quote/chart/chart.html?symb=djia&sid=1643&time=6mo&Submit1=Refresh
A Look at Gasoline Supply & Demand
After rising for a while, demand has followed its normal seasonal pattern lower.
Thirteen-week demand is at 8.863 million bpd, down 0.35% against last year. Thirteen-week supply is at 9.765 mln bpd, down 1.09%. Thirteen-week implied demand is at 9.585 mln bpd, down 0.77% against a year earlier
A Look at Distillate Supply & Demand
Demand has been rising seasonally – but from much lower levels.
Thirteen-week demand is at 3.666 million bpd, down 9.68% against last year. Thirteen-week supply is at 4.080 mln bpd, down 11.61%. Thirteen-week implied demand is at 4.163 mln bpd, down 6.90%.
A Look at Refinery Utilization
Utilization is 2.50% lower than a year ago and 7.86% below the eight-year average. It is 9.98% lower than the four-year, pre-Katrina average and 5.75% 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 on Friday, and the upward momentum turned out to be more or less false. Nonetheless, the seasonal starts in two weeks and we have to expect something to happen in regard to Iran. And there may be a reaction. We will want to be buyers in the first two weeks of March, for seasonal reasons that we will get to this week. Overwhelming those concerns, though, are events with Iran. US Secretary of State Hillary Clinton said yesterday that Iran is rapidly becoming a military dictatorship, and there are fresh fears that Iran’s Revolutionary Guards are pointing the country in the direction of increased militancy and confrontation. New sanctions against Iran seem imminent, and there is little left to sanction. Iran may retaliate in unanticipated ways. But Western powers may see that it makes more sense to confront Iran sooner rather than later. We are still holding capped-price programs as insurance against the kind of rally we saw last week and against any sudden events in Iran. We want some protection in place. Diesel Users We would hold our caps and will be buying more, soon. NYH Ultra Low Sulfur Diesel.…195.40-195.90 plus 3.750 USG Ultra Low Sulfur Diesel.…192.90-193.40 plus 1.250 Jet/Kerosene Users & Airlines New York Harbor cash market differentials were 2.00 to 2.50 cents over January heating oil in NY Harbor and 1.00 under to 0.75 under the screen in the US Gulf. Anything under 4 cents is worth hedging. Diesel & Gasoline Marketers We would keep product hedged against lower prices. Gasoline Blenders & End-Users We are increasingly worried about the Iranian wild card, and we will be buying in two weeks, so we want to get a foot in the door now. Prompt NYH Fuel Ethanol…..180.00-183.00 Prompt USG Fuel Ethanol….170.00-173.00 Quotes from 02-12-10 Heating Oil End-Users We would hold capped-price protection, and we may need to buy more soon. The seasonal is two weeks away, and Iran is really starting to concern us. Speculators We would buy some form of calls here. We will want to buy more in two weeks. Refiners The 7:5+2 crack spread was $6.78 on Friday. Crude Oil Producers Crude oil prices dropped on Friday. Fundamentally, prices are still too high. We are still worried that something will happen with Iran. | Prompt Jet Fuel Prices New York Harbor 193.90-194.40 US Gulf 190.90-191.15 Midwest (Group Three) 191.90-193.90 Midwest (Chicago) 189.90-190.40 Los Angeles 194.00-195.00 San Francisco 194.00-195.00 Portland, Oregon 194.00-195.00 Cents per gallon Propane Prices Mont Belvieu……….…..non-TET………$1.223420 Cents per gallon  Gasoline prices were lower on Friday, but they followed the same pattern that had been seen the previous four days. Prices sold off earlier in the day and rallied back to settle nearer the day’s highs. It is an unusual pattern that suggests a large long position being defended by someone.
Gasoline prices still have support at 187.00, 185.19, 184.19, 182.63, and 181.24, so we have a number of support levels beneath this market. There is resistance concentrated in the 194.65-194.90 area. |