Prices for February 16th, 2010
| HEATING OIL cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | MAR | 200.73 | 190.80 | 199.63 | up 07.74 | | APR | 201.65 | 191.75 | 200.59 | up 07.71 | | MAY | 202.58 | 192.77 | 201.61 | up 07.64 | | JUN | 203.51 | 194.50 | 202.80 | up 07.56 | | JUL | 205.67 | 197.28 | 204.91 | up 07.53 | | AUG | 207.02 | 198.76 | 207.06 | up 07.53 | | SEP | 209.45 | 207.57 | 209.29 | up 07.49 | | OCT | 212.00 | 210.25 | 211.77 | up 07.49 | | NOV | 214.14 | 206.50 | 214.15 | up 07.47 | | DEC | 217.00 | 208.06 | 216.51 | up 07.44 | | JAN | 218.32 | 216.45 | 218.91 | up 07.41 | | FEB | 229.95 | 229.95 | 230.16 | up 07.43 | | Estimated Volume (day before) total all prev day 115,013 | | NYMEX CRUDE OIL dollars per barrel | | MONTH | HIGH | LOW | SETTLE | CHANGE | | MAR | 77.42 | 73.71 | 77.01 | up 02.88 | | APR | 77.83 | 74.06 | 77.42 | up 02.92 | | MAY | 78.26 | 74.58 | 77.92 | up 02.89 | | JUN | 78.65 | 75.24 | 78.42 | up 02.85 | | JUL | 79.04 | 75.73 | 78.91 | up 02.83 | | AUG | 79.48 | 76.49 | 79.33 | up 02.79 | | | | | | | | | Estimated Volume… 621,097 Opec Basket…$71.72 up $0.17
Prompt #2 Oil NYH 88..-1.75 to -1.50, 74 Lo S…+0.75 to +1.25
US Gulf 88 grade…-4.50 to -4.25, 74 grade Lo S…-1.50 to -1.00 Group .........-6.00 to -5.50 Lo S.....-6.00 to -5.50
Chicago ......-5.00 to -4.00 cash quotes by Dow Jones | | | |
| NYMEX RBOB GASOLINE cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | MAR | 201.00 | 191.86 | 198.82 | up 05.87 | | APR | 213.17 | 204.07 | 211.34 | up 05.96 | | MAY | 214.31 | 206.05 | 212.59 | up 05.89 | | JUN | 214.25 | 205.69 | 212.90 | up 05.84 | | JUL | 213.19 | 209.06 | 212.55 | up 05.89 | | AUG | 212.31 | 211.86 | 211.85 | up 05.99 | | SEP | 211.81 | 210.42 | 210.93 | up 06.06 | | OCT | 200.02 | 200.02 | 200.13 | up 06.01 | | Estimated RB Volume day before 101,008 | | NYMEX NATURAL GAS dollars per mmBtu | | MONTH | HIGH | LOW | SETTLE | CHANGE | | MAR | 5.560 | 5.305 | 5.310 | dn 0.158 | | APR | 5.531 | 5.298 | 5.302 | dn 0.145 | | MAY | 5.572 | 5.357 | 5.360 | dn 0.135 | | JUN | 5.635 | 5.434 | 5.434 | dn 0.130 | | | Estimated Volume…day before (295,493)
Nymex statistics are based on composite Access & Day Sessions
Prompt Gasoline NYH M5 -1.25 /-1.00 RBOB +4.00 /+4.25
US Gulf M4: -3.00 to -2.75 RBOB +0.00 to +0.50
L.A. Conv Reg 201.00-202.00, N-grade Group 193.55-194.05 Chi 190.80-192.80 | |
Market Review for Tuesday
QUITIES rallied, the dollar dropped and investors rushed back into risk yesterday. Gold, silver and oil prices all benefited heavily. The buying only seemed to gather pace throughout the morning. It seemed that either the psychology or the underlying economy had a remarkable transformation over the holiday weekend. Some of it could be early buying against the seasonal tendency, or some could be concern over Iran. Neither was mentioned, though.
Iranian President Mahmoud Ahmadinejad said yesterday that Iran will continue to enrich uranium to its own specifications unless Western powers provide the nuclear fuel for Teheran’s medical research reactor on Iran’s terms. And he went on to say that the UN Security Council would “regret” any new sanctions it makes against Iran (see more in Fuel for Thought on page 2). In the past, Iran has threatened to close the Straits of Hormuz or target US or other ships in the Petroleum Gulf in retaliation for various steps that the West might take. This is why we are in a state of elevated concern right now.
| Fuel for Thought Underlining our recent concerns, Iranian President Mahmoud Ahmadinejad warned the West, “If anybody seeks to create problems for Iran, our response will not be like before. Something in response will be done which will make them regret” taking those steps. This applies to sanctions or more. Iran continues to insist on a “simultaneous” exchange of fuel rods for enriched uranium. Western powers have rejected this condition. The US, Russia and France said yesterday that Iran’s further enrichment of its uranium to 20% further undermines international trust in Teheran’s intentions. They do not like the idea of Iran enriching its own uranium rather than to buy or trade for fuel rods with a single purpose. |
When newswires writers recapped the day, the story was that European leaders had made progress in assuring the world that Greece’s sovereign debt problem will not become an anchor weighing on the economic recovery of continental Europe. The official story is that the International Monetary Fund (IMF) will be “watching closely” as Greece develops a plan to cut its budget deficit, and that after a month, the EU will demand any needed changes. Investors fully bought the story, as uninspiring as it seems.
Yesterday’s strength could have come from any of a number of different sources. The stronger DJIA, which was up 169.67 points was certainly one source. The weaker US dollar was certainly another. But the story that those markets were impressed by the new “hard line” being taken by the EU as a group rings a little hollow. We cannot be sure what part, if any, fresh concerns over Iran’s nuclear program had, or if traders were buying ahead of the March seasonal tendency for stronger prices.
We tend to look at yesterday from a different angle: If that’s how much prices can advance on nothing we should be careful if we get something bullish.
Technicals
The bulls started this week with much more than they had during their four days higher last week. Yesterday’s advance had everything that last week’s rallies did not – genuine strength, momentum and upward thrust. Where last week’s rises looked like rallies in a bear market, yesterday’s rise looked like the first advance in a continuing move higher. It has a number of technical tests, starting with crude resistance at $78.04. A break over that would be bullish.
Cents per gallon
Above: Yesterday’s advance in crude oil strikes us as the start of something bigger. We have to expect a test of the recent highs.
March crude oil now has buy-stops over $77.45, $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 $73.70, $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 200.75, 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 190.80, 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 201.00, 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 191.85, 187.00, 184.15, 182.40, 181.20, 179.20, 177.30, 175.14, 171.40, and 170.25.
Football: The bulls gained 29 yards yesterday on second and 21, instantly getting a fresh set of downs. Bulls’ first down.
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: $77.30-$77.45, $77.95-$78.05, $78.25-$78.36, $79.31-$79.50, $80.60-$80.70.
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: 200.60-200.75, 202.50-202.62, 203.50-203.72, 204.35-204.45, 205.60-205.75.
Mar Rbob Support: 191.85-192.00, 188.90-189.00, 188.25-188.40, 187.00-187.15, 184.15-184.30.
Resistance: 200.85-201.00, 203.60-203.75, 206.25-206.35, 206.60-206.65, 207.20-207.35.
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 0.800 | dn 0.356 mln bbls | up 12.400 |
| Gasoline | up 1.00 to 1.50 | up 1.100 | up 2.324 | up 13.000 |
| Crude oil | up 1.25 to 2.25 | dn 0.200 | up 2.424 | dn 21.800 |
| Utilization | up 0.3% to 0.8% | up 0.7% at 82.3% | up 1.40% at 79.10% | |
| Crude Imports | dn 0.000 to 0.500 mmbd | dn 0.859 to 8.793 | 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 1,980 contracts on Friday, when prices were lower. That looks like new selling and is bearish. It is not enough to draw major conclusions.
Heating oil open interest fell by 2,449 contracts on Friday, when prices were lower. That looks like long liquidation and is supportive.
RBOB open interest grew by 1,182 contracts on Friday, when prices were lower. That looks like new, net selling and is bearish.
Natural gas open interest grew by 7,227 on Friday, when prices were higher. That looks like good, new buying and is supportive. It is a second straight day of heavy, new buying.
Friday’s Open Interest Changes:
Crude 1,333,444 up 1,980 Heat 304,031 dn 2,449 RBOB 258,198 up 1,182 Nat gas 781,793 up 7,227
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 mysteriously bucked the trend in a number of commodities, most notably in the oil complex. The official story was that traders were selling against ample supplies, but there is good reason to expect that this week’s report could eat into the existing surpluses against both a year ago and the five-year average. As we wrote in yesterday’s report, we should expect a draw of something more than 150 bcf and possibly as much as 175 bcf. Last year, there was a drawdown of just 24 bcf and the five-year average is a draw of about 126 bcf-130 bcf. This gives the market plenty of room to improve against the historical comparisons.
On top of that potentially bullish outlook, the temperature forecast went right back into its colder-than-normal mode. On Friday, the latest forecast had been for a potentially moderating trend at the end of this month; when we returned to this market yesterday, that had been revised back to the previous colder-than-normal expectation through the start of March.
The bears are apparently looking beyond this coming report toward the end of the heating season, which is a normal preoccupation at this point in February. What traders always seem to forget is that we have a solid six or seven weeks of heating demand left, and that can sometimes be extended by a week or three into April. With temperatures having trended towards the colder side for a solid 15 months now, we have every reason to believe that it will be a longer-than-normal heating season. The bears would counter than withdrawals will start to decline with time, and that is harder to answer.
Technically, yesterday’s activity was clearly bearish and sends prices back into last week’s consolidation. Yesterday’s final price of $5.31 is still far away enough from major support at $5.00-$5.06 for the bulls to recover, but if the bears keep putting pressure on prices, that might only be a one or two-day cushion. We expect prices to firm ahead of this week’s report – provided temperature forecasts remain on the colder side. The bears do have higher production levels on their side, and that could till tip the balance to the downside.
In cash trading yesterday, Henry Hub prices were at $5.63-$5.69, up 0.04-$0.19 on the day (DJN). SoCal prices were at $5.58-$5.66, up $0.15-$0.18 on the day. El Paso Permian prices were up $0.08-$0.13 to $5.37-$5.48. Katy prices were up $0.20-$0.22 to $5.58-$5.65. Waha prices were up $0.11-$0.18 at $5.46-$5.56. Transco 6 was down $0.86 and up $0.04 to $6.31-$6.50/mmBtu, according to Dow Jones News (DJN). Readings remain cold across much of the nation.
Palo Verde prices were last quoted at $45.00-$48.25/mwh. Northeastern prices last traded at $37.15-$58.50. Entergy was last at $44.75-$45.25. Ercot was last at $52.00-$53.00/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 found a way to stand it all on its head yesterday.
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 up $0.48 at $77.49/barrel at 8.30 PM EST, last night. March heating oil prices were up 1.15 cents to 2.0078/gallon. March RBOB prices were up 1.44 cents to 2.0026. March natural gas prices were up $0.016 to $5.326/mmBtu. Crude prices reached a two-week high in trading in Asia this morning, as traders and investors reacted to a renewed sense of optimism and fresh appetite for risk. DOE Expectations The table below lists the final survey results for Dow Jones, Bloomberg and Reuters. The DOE report will be released at 11.00 AM EDT on Thursday morning this week because of the Presidents’ Day holiday. Category Dow Jones Bloomberg Reuters Crude up x.x00 up 1.600 up 1.900 mln bbls Distillate dn x.x00 dn 1.500 dn 1.600 Gasoline up x.x00 up 1.500 up 1.600 Utilization up 0.x% up 0.19% up 0.30% 
Crude oil prices advanced strongly yesterday in a move that suggests we have more coming on the upside. Yesterday’s reasons for the advance were second rate, but the advance, itself, was not. | 
Heating oil prices advanced sharply yesterday, and it looks like the start of something bigger. Cold weather might be a factor in another year, but it has done little for demand this winter. It dies look strong. 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 jumped higher yesterday on little fresh news. | |
We remain concerned about Iran, and saw little reason for yesterday’s steep gains. It is possible that we are seeing buying ahead of the seasonal tendency. It seems that the psychology shifted strongly to the long side over the weekend.
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 dropped substantially yesterday in a major rally for the euro. Early today, the dollar has staged a mild recovery. This will continue to set the tone for commodity traders.
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 up 169.67 points yesterday. The reported reason for yesterday’s strength was that EU ministers seem determined to avoid a major problem with Greece’s sovereign debt.
Source: http://money.cnn.com/quote/chart/chart.html?symb=djia&sid=1643&time=6mo&Submit1=Refresh
A Look at Inventories
Gasoline inventories continue to rise and are 13.0 million barrels (5.98%) higher than a year ago.
A Look at Imports
Gasoline imports may be beginning a normal seasonal increase.
Distillate imports have recovered dramatically.
Thirteen-week crude oil imports remain at historically low figures.
Recommendations for Specific Market Segments
Heating Oil Distributors Heating oil prices were up dramatically yesterday as traders and investors reacted to higher equities and lower dollar values. There was nothing in Friday’s DOE report which suggested that we should expect cold weather to help demand in this market. We still will want to be buyers in the first two weeks of March, for seasonal reasons that we are going to include in the next few reports, starting with tonight’s (for tomorrow). The seasonal has worked at least 77% of the time, over 30 years, and the strongest percentage even reaches above 83%. It calls for the purchase of June heating oil in the first two weeks of March and the sale of those positions before May 15th. We will be covering it in detail in two special reports to be attached over the next few reports. It is possible that yesterday’s buying, or some of it, was early buying ahead of the seasonal influence. We are still holding capped-price programs as insurance against the kind of rally we saw yesterday. We do continue to see Iran as a potentially explosive wild card in this market. Diesel Users We would hold our caps and will be buying more, soon. NYH Ultra Low Sulfur Diesel.…203.90-204.15 plus 4.375 USG Ultra Low Sulfur Diesel.…200.65-201.15 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 -.50 under to even with 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, here, and we will be looking to buy for April and part of next year in early March. If we see any sudden weakness before then, we would use it to buy. 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 $6.59 yesterday. Crude Oil Producers Crude oil prices advanced yesterday and they looked like they have further business on the upside. | Prompt Jet Fuel Prices New York Harbor 201.65-202.15 US Gulf 199.15-199.65 Midwest (Group Three) 199.65-201.15 Midwest (Chicago) 197.65-198.15 Los Angeles 203.00-204.00 San Francisco 203.00-204.00 Portland, Oregon 203.00-204.00 Cents per gallon Propane Prices Mont Belvieu……….…..non-TET………$1.253410 Cents per gallon  Gasoline prices advanced briskly yesterday and it looks like the start of something bigger. This does not look a rally in a bearish market; it looks like the beginning of a major advance.
We are coming into the best time of year for gasoline prices and this may be buying ahead of that seasonal tendency. |