Prices for March 5th, 2010
| HEATING OIL cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | APR | 210.79 | 207.30 | 209.74 | up 02.87 | | MAY | 212.08 | 208.59 | 211.04 | up 02.90 | | JUN | 213.35 | 209.96 | 212.35 | up 02.89 | | JUL | 215.06 | 211.76 | 214.19 | up 02.84 | | AUG | 217.05 | 213.65 | 216.01 | up 02.84 | | SEP | 218.76 | 216.70 | 217.95 | up 02.89 | | OCT | 221.00 | 220.02 | 220.21 | up 02.90 | | NOV | 223.40 | 220.40 | 222.58 | up 02.92 | | DEC | 225.91 | 223.37 | 225.02 | up 02.93 | | JAN | 228.23 | 226.20 | 227.30 | up 02.93 | | FEB | 229.16 | 228.15 | 228.50 | up 02.94 | | MAR | 229.10 | 228.00 | 228.34 | up 02.93 | | Estimated Volume (day before) total all prev day 93,406 | | NYMEX CRUDE OIL dollars per barrel | | MONTH | HIGH | LOW | SETTLE | CHANGE | | APR | 82.07 | 80.47 | 81.50 | up 01.29 | | MAY | 82.47 | 80.89 | 81.92 | up 01.29 | | JUN | 82.89 | 81.36 | 82.37 | up 01.27 | | JUL | 83.30 | 81.83 | 82.82 | up 01.28 | | AUG | 83.60 | 82.27 | 83.18 | up 01.30 | | SEP | 83.78 | 82.54 | 83.49 | up 01.31 | | | | | | | | | Estimated Volume… 553,811 Opec Basket…$76.42 dn $0.10
Prompt #2 Oil NYH 88..-1.50 to -1.25, 74 Lo S…+3.50 to +4.00
US Gulf 88 grade…-4.25 to -3.75, 74 grade Lo S…+1.25 to +1.75 Group .........+2.25 to +2.75 Lo S.....+2.25 to +2.75
Chicago ......-2.00 to -1.25 cash quotes by Dow Jones | | | |
| NYMEX RBOB GASOLINE cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | APR | 228.31 | 224.02 | 227.10 | up 03.73 | | MAY | 228.40 | 224.35 | 227.34 | up 03.74 | | JUN | 227.69 | 223.86 | 226.58 | up 03.62 | | JUL | 226.64 | 223.15 | 225.66 | up 03.55 | | AUG | 225.25 | 224.26 | 224.64 | up 03.51 | | SEP | 224.16 | 221.96 | 223.42 | up 03.49 | | OCT | 213.45 | 212.62 | 212.97 | up 03.42 | | NOV | 212.25 | 211.99 | 211.85 | up 03.42 | | Estimated RB Volume day before 88,673 | | NYMEX NATURAL GAS dollars per mmBtu | | MONTH | HIGH | LOW | SETTLE | CHANGE | | APR | 4.626 | 4.540 | 4.593 | up 0.018 | | MAY | 4.690 | 4.612 | 4.659 | up 0.016 | | JUN | 4.751 | 4.690 | 4.729 | up 0.012 | | JUL | 4.843 | 4.779 | 4.820 | up 0.014 | | | Estimated Volume…day before (208,920)
Nymex statistics are based on composite Access & Day Sessions
Prompt Gasoline NYH M5 -10.25 to -10.00 RBOB -1.00 /+1.00
US Gulf M4: -12.75 to -12.50 RBOB -1.75 to -1.50
L.A. Conv Reg 227.00-228.00, N-grade Group 215.85-216.35 Chi 210.10-211.10 | |
Market Review for Friday & over the Weekend
IL prices were higher on Friday, as traders reacted to the better-than-expected February monthly unemployment report. This report showed a decline of 32,000 jobs, but expectations had been for a loss of 68,000. This report helped equities and commodities, and many analysts saw in the numbers seeds of hope that March’s figures could actually show an increase in employment. Heavy snows had been a factor in February’s job losses, and these seem less likely as a factor during March, so there was a powerful element of hope in Friday’s trading.
Equities were strongly higher, breaking above recent resistance levels, with the DJIA gaining 122.06 points on the day. The US dollar was stronger on Friday, as well, and it posted its best gains against the euro later in the session, although the euro recovered some of its losses Friday afternoon and evening. Friday’s activity seemed to show us something that could be significant moving forward: It seems that the market will follow equities in preference to the US dollar, at least to the upside.
| Fuel for Thought Iraqi elections were held yesterday, and expatriates lined up in countries like Jordan to cast their votes on Friday and Saturday. Some 200,000 Iraqis living in Jordan were expected to vote, and as many as 2 million Iraqis are living abroad, with most seem to be waiting for a better atmosphere of security before returning. Three hundred and twenty-five members will be elected to Iraq’s parliament, and the party gaining the largest share will be invited to form a government to rule for the next four years. On Saturday, a car bomb was detonated near a shrine to Imam Ali, in the city of Najaf. Two Shi’ite pilgrims (from Iran) were killed and 54 (33 from Iran) were wounded. Shia is the path of Ali. Al Qaida has threatened potential voters. |
This coming week will give us a glimpse at wholesale inventories on Wednesday, and economists expect that businesses will have started rebuilding lean stockpiles during the first quarter, after drawing them down over the second half of 2009. If they did start rebuilding inventories, that will have helped economic growth; if they have not yet started, that is something that will help out later. Estimates suggest an increase in wholesale inventories of 0.2%.
He US trade deficit and weekly unemployment figures will be released on Thursday, and on Friday, we will see retail sales and the Reuters/University of Michigan take on consumer sentiment. We will also see business inventories on Friday. As a result, the second half of this week seems likely to be dominated by reports, starting with the weekly DOE figures and ending with retail sales.
So far, the seasonal tendency for higher prices has been true to form. It is still too early to proclaim it a success, but it is on the right track, already, it seems. One of the biggest factors has been the improvement in refinery margins, which is likely to lead to higher crude oil prices and demand by refineries moving forward.
Technicals
Oil prices had a strong week, and crude oil prices gained $1.84 a barrel. On continuation charts, heating oil prices gained 7.25 cents and gasoline gained 19.22 cents a gallon, much of that with the switch from March to April as the front month. Gasoline already has broken out and has objectives to 242.28 and potentially as high as 289.89. If crude oil prices break and finish above $83.95, it will have objectives to $94.85 and $98.33 and to potentially higher numbers.
Dollars per barrel
Above: The crack spread, which reflects refining margins, took a jump with the switch to April gasoline. It is a positive factor, now.
April crude oil now has buy-stops over $82.10, $82.35, $83.95, $84.83, $85.13, $89.82, $90.99, $93.02, $96.03, and $100.37. Sell-stops are under $80.45, $79.40, $78.00, $77.00, $76.30, $73.70, $72.60, $71.30, $70.75, $69.30, $68.55, $68.00, $65.80-$66.20, and $64.95. April heating oil has buy-stops over 210.79-210.91, 211.90, 217.55, 222.72, 225.80, 227.05, 229.08, 238.95, 249.62, and 251.50. Sell stops are under 207.30, 206.00, 205.40, 201.55, 200.55, 199.00, 196.40, 190.75, 189.95, 187.45, 186.50, 182.63, 177.00, 176.68, 173.75, 171.10, 170.35, and 168.60. April RBOB has buy-stops over 228.31, 228.86, 240.10, 250.40, 252.00, 265.10, 267.85, and 270.85. Sell-stops are under 224.00, 221.70, 219.00-219.10, 215.50, 213.70, 203.80, 202.25, 198.40, 191.85, 187.00, 184.15, 182.40, 181.20, 179.20, 177.30, 175.14, 171.40, and 170.25.
Football: The bears lost 13 yards on fourth and 26, on Friday, and that gives the bulls a first down to start the new week.
Technical Support & Resistance
Apr crude oil Support: $80.45-$80.60, $79.40-$79.50, $78.00-$78.10, $77.00-$77.20, $76.30-$76.60.
Resistance: $82.00-$82.10, $82.30-$82.35, $83.85-$83.95, $84.75-$84.85, $85.00-$85.15.
Apr heating oil Support: 207.30-207.40, 206.00-206.20, 205.40-205.55, 201.55-201.70, 200.55-200.70.
Resistance: 210.79-210.91, 211.80-211.90, 217.45-217.55, 222.65-222.75, 225.65-225.80.
Apr Rbob Support: 224.00-224.10, 221.70-221.90, 219.00-219.15, 215.50-215.65, 213.70-213.85.
Resistance: 228.20-228.31, 228.75-228.86, 239.95-240.10, 250.25-250.40, 251.80-252.00.
Oil Inventory Reports
This week’s DOE report has historically shown drawdowns in refined products stocks and builds in crude oil inventories. Crude imports have generally started to increase, as refinery margins improve (partly because we see lower products stocks sand higher crude oil stocks). Demand traditionally starts to recover before refinery utilization catches up to it, and that helps to draw down products stocks which, in turn, helps margins, which encourages refiners to rebuild crude stocks for processing in May and then in the summer. We will be looking at this report for signs that these aspects are being reflected.
Last Week’s Inventory Comparison: Distillate stocks are now 6.0 million bbls, or 4.12%, higher than a year ago. Heating oil inventories are 5.8 mln bbls, or 15.89%, higher than they were a year ago. Gasoline stocks are 16.0 mln bbls (up 7.41%) higher against a year ago. Crude oil stocks are now 13.1 million bbls, or 3.69%, lower than a year ago. Residual stocks are 1.2 mln bbls (3.09%) higher than a year ago, jet fuel stocks are 0.7 mln bbls, (1.64%) higher than a year ago. Utilization is 1.20% lower than a year ago and 4.76% below the eight-year average. It is 6.43% lower than the four-year, pre-Katrina average and 3.10% 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 19.314 million bpd, up 0.219 mln bbls on the week, and up 0.563 mln bpd and 3.00% against a year ago. Three weeks ago, it was 0.159 mln bpd and 0.83% lower than a year ago. Four-week gasoline demand is at 8.808 mln bpd, up 0.06%, compared to down 1.26% two weeks ago. It was up 67,000 bpd on the week. Four-week distillate demand is now at 3.744 mln bpd, down 4.78%, compared to down 9.08% four weeks ago. Four-week jet demand is now at 1.292 mln bpd, down 3.80% against a year ago, compared to up 8.17% eight weeks ago. Four-week residual fuel demand is at 0.678 mln bpd, up 28.65%, compared to down 34.14% four weeks ago. Propane use is up 9.06%, to 1.420 mln bpd. On a weekly basis, gasoline demand dropped 182,000 bpd and lost 32,000 bpd in output and 71,000 bpd in imports. Distillate demand was up 167,000 bpd while supplies were up 131,000 bpd.
Last Week’s API Report: This week’s API report showed a build of 2.665 mln bbls in crude oil stocks, a draw of 4.074 mln bbls in distillate stocks and a build of 0.909 mln bbls in gasoline inventories. Utilization was up 0.8% to 81.6%. Implied demand came in at a healthy 9.340 mln bpd in gasoline and at a strong 4.698 mln bpd in distillate. Crude oil imports were up 0.609 mln bpd to 9.801 mln bpd, which is its highest level in months. It also suggests renewed refining activity in the weeks ahead – if it sticks. Refined products demand was strong in this report.
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 1.25 to 1.75 mln bbls | up 1.662 | dn 0.843 mln bbls | up 6.000 |
| Gasoline | dn 0.75 to 1.25 | up 0.168 | up 0.773 | up 16.000 |
| Crude oil | up 2.00 to 3.00 | dn 0.757 | up 4.034 | dn 13.100 |
| Utilization | up 0.0% to 0.5% | up 1.7% at 83.1% | up 0.70% at 81.90% | |
| Crude Imports | up 0.000 to 0.250 mmbd | up 0.259 to 9.028 | up 0.152 to 9.236 mln bpd | |
| DOE Distillate Demand | 3.829 mln bpd | up 167,000 | Gasoline Demand | 8.882 mln bpd | dn 132,000 |
| DOE Distillate Production | 3.812 mln bpd | up 1221000 | Gasoline Production | 8.831 mln bpd | dn 032,000 |
| DOE Distillate Imports | 0.354 mln bpd | dn 090,000 | Gasoline Imports | 0.775 mln bpd | up 137,000 |
Source: US Department of Energy’s Energy Information Administration
Open Interest Analysis
Crude oil open interest grew by 14,951 contracts on Thursday, when prices declined. That looks like new selling and would be negative. We expect that funds were buying on weakness. There were 47,946 contracts added last week/
Heating oil open interest grew by 3,320 contracts on Thursday, when prices were lower. That looks like new buying and is supportive. There were 15,298 contracts added last week.
RBOB open interest grew by 8,214 contracts on Thursday, when prices were lower, which would be heavy new buying. There were 25,024 contracts added over the last week. Oil open interest has increased substantially along with prices lately.
Natural gas open interest grew by 8,517 on Thursday, when prices were lower. That looks like new selling and would be bearish.
Thursday’s Open Interest Changes:
Crude 1,321,953 up 14,951 Heat 311,945 up 3,320 RBOB 286,791 up 8,214 Nat gas 832,603 up 8,517
CFTC Commitments of Traders for Nymex (Forensic analysis for the period ended Tuesday, March 2nd)
Crude oil prices rallied $0.82/bbl over the latest reporting period, and the best buying came from Managed Money accounts. They bought 8,937 new longs and covered 2,617 shorts. Producers added 14,048 new shorts, which is normal, but they also added 15,738 new longs, which suggest refiner buying in anticipation of better margins. Swap Dealers liquidated 5,908 existing longs, with Other Reportables liquidating 1,001 longs, and Swap Dealers added 5,674 new shorts while Other Reportables added 4,488 new shorts. Funds were the motivating force behind higher prices, but refinery buying helped.
In heating oil futures, prices rallied 1.35 cents a gallon, and the best net buying came from Producer short-covering. Producers added 463 new longs and covered 2,169 existing shorts, presumably at least in part in front of the March contract expiration, which occurred during the period. All three other categories liquidated longs and added fresh shorts into the rise, with Other Reportables liquidating 843 longs and selling 2,295 new shorts. Commercial short-covering led the rally.
Gasoline prices gained 2.83 cents a gallon during the period under review. Swap Dealers and Producers were buying, although Producers sold more than double what they bought. Producers added 2,860 longs and 5,270 shorts. Swap Dealers added 3,971 longs and covered 159 shorts. Funds added 422 longs and 3,715 shorts. Others liquidated 1,034 longs and covered 151 shorts. Swap Dealers were far and away the most aggressive category buying. Producers did buy, though.
In natural gas, prices dropped 10.1 cents during the period under review. Everyone (other than funds) was buying new longs and covering shorts, except Producers, who added 1,259 new shorts, in addition to 3,452 longs. Swap Dealers added 6,433 new longs and covered 167 shorts. Other Reportables added 6,911 new longs and covered 5,141 shorts. Managed Money accounts added 3,542 new longs, but those were dwarfed by the addition of 19.970 new shorts, which was the motive force lower. Funds were pressing quotes lower with a will, while everyone else was buying and covering short holdings.
Natural Gas & Utility Generation
Natural gas prices rallied lightly on Friday as traders were influenced by the general renewal of risk enthusiasm in the wake of the February unemployment figures. This was augmented by bargain-hunting and short-covering ahead of the weekend. Traders were looking ahead to the possibility of new, colder weather forecasts once we returned from the weekend.
Last week’s ending forecasts were calling for normal or even above-normal readings for the middle of March. The trend, as we have noted here, is colder than normal. We could be looking at a change in that trend, and the March-May period is one during which trend changes have occurred; October and April are the two most likely months for these trend changes.
On Friday, we got another look at the commitments of traders for the week ended March 2nd. And, once again, the selling came almost exclusively from funds., Commercial accounts were buying and covering shorts, and commission houses and small speculators and hedgers were also buying outright long contracts or were covering previously established short holdings. Producers, which normally would be selling to hedge output, sold lightly but were buying heavily. Swap dealers and other reportable accounts were buying and covering shorts in large numbers. Managed money accounts added almost 20,000 new shorts, against only 3,542 new longs.
The bears have deeper pockets and temperature forecasts on their side. The bulls have the huge improvement in underground storage levels, although they have not gotten the play they probably should have – largely because so many headlines recently have been bearish. At some point, one would have to imagine that the funds would look to cover at least some of their shorts, but we have not seen any sign of it starting, yet. Technically, the near-term trend is lower. If we get fresh forecasts for warming temperatures today, we would expect more selling.
In cash trading yesterday, Henry Hub prices were at $4.52-$4.65, down $0.15-$0.18 on the day (DJN). SoCal prices were at $4.62-$4.74, down $0.11-$0.17 on the day. El Paso Permian prices were down $0.11-$0.16 at $4.44-$4.57. Katy prices were down $0.10-$0.16 to $4.51-$4.61. Waha prices were down $0.09-$0.20 at $4.43-$4.59. Transco 6 was down $0.27-$0.29 to $4.95-$5.01/mmBtu, according to Dow Jones News (DJN).
Palo Verde prices were last quoted at $40.50-$42.00/mwh. Northeastern prices last traded at $41.50-$47.25. Cinergy was last at $33.90-$35.00. Ercot was last at $35.50-$38.75/mwh.
Support is at $4.54-$4.56, $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 $4.62-$4.63, $4.76-$4.79, $4.86-$4.89, $4.97-$5.00, $5.16-$5.17, $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.
Apr Natural Gas: Support : $4.54-$4.56, $4.40-$4.43, $4.15-$4.17, $4.05-$4.08, $3.73-$3.75, $3.66-$3.68.
Resistance: $4.62-$4.63, $4.76-$4.79, $4.86-$4.89, $4.97-$5.00, $5.16-$5.17, $5.46-$5.47.
Natural gas prices were up slightly on Friday, after spending most of the day trading near unchanged.
Dollars per million Btu
The crude to gas ratio settled at 17.74-to-one on Friday, its highest ratio since November 19th, 2009.
Ratio
EIA Weekly Storage Figures
Last week’s EIA report showed a draw of 172 bcf on expectations for a draw of 169-170 bcf. Stocks are now 71 bcf lower than a year ago, against a deficit of 56 bcf a week ago, a surplus of 26 bcf two weeks ago and a surplus of 172 bcf three weeks ago. Stocks are now 3.93% lower than a year ago. They are 21 bcf and 1.22% above the five-year average.
For this week, the eight-year average (of similar Friday reports) was a draw of 95.0 bcf. The five-year average was also a draw of 95.0 bcf. Last year’s draw was 112 bcf. That becomes the breakeven point, year-on-year, with 95 the average figure.
EIA Report
| Region | 02-26-10 | 02-19-10 | Change | Last Year | 5 Yr Avg |
| Cons East | 861 | 935 | dn 74 | 805 | 870 |
| Cons West | 296 | 311 | dn 15 | 293 | 242 |
| Producing | 580 | 607 | dn 27 | 710 | 604 |
| Total US | 1737 | 1853 | dn 116 | 1808 | 1716 |
Bcf, or Billions of cubic feet. Source: Energy Information Administration, US Department of Energy
News & Views
| In trading on Nymex, April crude oil prices were up $0.51 at $82.01/barrel at 10.30 PM EST, last night. April heating oil prices were up 1.40 cents to 2.1114/gallon. April RBOB prices were up 1.65 cents to 2.2875. April natural gas prices were down $0.073 to $4.520/mmBtu. Momentum higher seems to have pushed quotes higher in Asia last night. Two huge factors have changed over the last week, and they are likely to influence trading over the next few weeks. The first is the switch to the April gasoline contract, which has helped refinery margins, giving fundamental support. The other factor was the big increase in oil open interest as prices advanced, which is bullish. Funds have been buying a lot. Iraq: Al Qaida has threatened Iraqi voters, and imposed a “curfew” on Sunday, ominously warning that anyone who defied the curfew would “expose himself to the anger of Allah and … all kinds of weapons of the mujahedeen.” The terror group has threatened to disrupt elections through “military means,” in a desperate attempt to keep minority Sunnis, who boycotted elections in 2005, from voting in large numbers. 
Crude oil prices were higher on Friday, and they settled at their highest level since January 12th. The next resistance level is $83.95. If prices break that decisively, they may attack $87.00 & $90.00. | 
Heating oil prices were higher on Friday and they settled at their highest level since January 12th. Resistance is now at 212.89 and then at the major high at 222.72. DOE History: Distillate stocks have fallen in five of the last eight years, by an average of 2.305 mln bbls. The eight-year average is a draw of 0.777 mln bbls. Gasoline stocks fell in seven of the last eight years, for a seven-year draw of 1.928 mln bbls and an eight-year average draw of 1.475 mln bbls. Crude oil stocks have been higher in seven of the last eight years for a seven-year average build of 2.889 mln bbls and it has an eight-year average build of 2.053 mln bbls. Utilization has been higher in four of the last eight years and has an eight-year average increase of 0.525%, with an eight-year average utilization figure of 86.82%. The four-year, pre-hurricane utilization average was 88.90%. Since Katrina, refineries have run at an average utilization rate of 84.75%. Crude oil imports have been higher in four of the last six years, and the average crude oil import figure over the last six years has been up 115,000 bpd. The average crude oil import figure over the last six years has been 9.698 million bpd. Imports were 462,000 bpd below that figure in last week’s report. |
| Crude prices have resistance up to $81.23. | |
The close calls seem to be falling for the bulls. Traders are putting their main focus on the bullish factors on any given day, choosing between the dollar and equities depending upon which one is more bullish. We still expect to have natively bullish factors – like petropolitical events – in the next two months. This gives the seasonal a leg up.
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, although the biggest gains came late in the day. In trading Friday afternoon and evening, the euro recouped some of its losses. The February jobs figure was the biggest factor on Friday.
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 with a gain of 122.06 points on Friday, and the strength in equities was one of the main factors behind higher oil prices on Friday. The jobs report (February) was the primary motive factor behind higher equities quotes.
Source: http://money.cnn.com/quote/chart/chart.html?symb=djia&sid=1643&time=6mo&Submit1=Refresh
A Look at Inventories
Gasoline inventories are 16.0 million barrels (7.41%) higher than a year ago, here.
Crude oil inventories are rebuilding ahead of higher utilization this summer.
A Look at Imports
Thirteen-week distillate imports have staged a remarkable recovery.
Crude imports remain at what have traditionally been post-hurricane levels.
Recommendations for Specific Market Segments
Heating Oil Distributors Heating oil prices finished on a strong note on Friday, and prices now have resistance at 212.89 and then at the major high at 222.72. We have no reason to expect prices to fail at either of these hurdles, despite the fact that we have plenty of products in inventories and consumption remains depressed. This advance is all about momentum, equities, someti9mes a weaker dollar, and it will ultimately be influenced by better refinery margins and petropolitical factors. The fact that the seasonal has started as strongly as it has this year tells us a story about what is moving this market. It has not been about fundamentals for a while, now. Right now, it is all about the economy and equities and “risk appetite.” We continue to prefer using caps or calls, where possible, and we would be buying into any weakness, here. Diesel Users We would hold our caps and will be buying more on any dips. NYH Ultra Low Sulfur Diesel.…214.75-215.25 plus 5.250 USG Ultra Low Sulfur Diesel.…212.75-213.25 plus 3.250 Jet/Kerosene Users & Airlines New York Harbor cash market differentials were 5.50 to 6.00 cents over January heating oil in NY Harbor and 1.75 to 2.25 over the screen in the US Gulf. Diesel & Gasoline Marketers The sensible course is to stay hedged, but one can buy on a dip and wait to hedge it – carefully. Gasoline Blenders & End-Users Prices have broken to the upside, and we want to buy on any dip. Prompt NYH Fuel Ethanol…..171.00-174.00 Prompt USG Fuel Ethanol….162.00-164.00 Quotes from 03-05-10 Heating Oil End-Users We want to use dips to get in on the long side, using caps or calls. Speculators We bought calls last week, and we would continue to buy calls on any decent dips until March 15th. Refiners The 7:5+2 crack spread was $11.80 on Friday. Crude Oil Producers Crude oil prices have resistance at $83.95, and a decisive break above that level would point prices towards $94.85 and possibly higher. | Prompt Jet Fuel Prices New York Harbor 215.25-215.75 US Gulf 211.50-212.00 Midwest (Group Three) 212.50-214.75 Midwest (Chicago) 212.25-212.50 Los Angeles 213.00-214.00 San Francisco 213.00-214.00 Portland, Oregon 213.00-214.00 Cents per gallon Propane Prices Mont Belvieu……….…..non-TET………$1.201250 Cents per gallon  Gasoline prices continued their move higher on Friday, printing their highest settlement level since October 1st, 2008. This is a decisive breakout and long-term charts give us a swing objective to $2.8989 – almost $2.90 a gallon. If we get there, retail prices would presumably be more than $3.50 a gallon with high prices licking up against $4.00 a gallon.
Obviously, a lot can happen to prevent that from happening, or it could take months or even years to get there. But, if we get the wrong confluence of events, prices could gain 60 cents a gallon in a short period of time. A nearer-term objective is to 242.28. |