Prices for March 8th, 2010
| HEATING OIL cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | APR | 212.00 | 208.50 | 210.55 | up 00.81 | | MAY | 213.05 | 209.85 | 211.94 | up 00.90 | | JUN | 214.20 | 211.12 | 213.37 | up 01.02 | | JUL | 215.72 | 213.75 | 215.18 | up 00.99 | | AUG | 217.48 | 214.79 | 216.96 | up 00.95 | | SEP | 219.36 | 217.65 | 218.96 | up 01.01 | | OCT | 221.88 | 219.29 | 221.33 | up 01.12 | | NOV | 224.30 | 221.69 | 223.79 | up 01.21 | | DEC | 227.01 | 224.88 | 226.30 | up 01.28 | | JAN | 228.61 | 227.74 | 228.65 | up 01.35 | | FEB | 230.00 | 228.50 | 229.95 | up 01.45 | | MAR | 230.00 | 229.57 | 229.85 | up 01.51 | | Estimated Volume (day before) total all prev day 77,759 | | NYMEX CRUDE OIL dollars per barrel | | MONTH | HIGH | LOW | SETTLE | CHANGE | | APR | 82.41 | 80.75 | 81.87 | up 00.37 | | MAY | 82.82 | 81.22 | 82.31 | up 00.39 | | JUN | 83.22 | 81.71 | 82.78 | up 00.41 | | JUL | 83.61 | 82.20 | 83.25 | up 00.43 | | AUG | 84.00 | 82.63 | 83.63 | up 00.45 | | SEP | 84.24 | 82.98 | 83.96 | up 00.47 | | | | | | | | | Estimated Volume… 549,484 Opec Basket…$77.27 up $0.85
Prompt #2 Oil NYH 88..-1.25 to -1.00, 74 Lo S…+3.75 to +4.25
US Gulf 88 grade…-4.50 to -4.25, 74 grade Lo S…+1.00 to +1.25 Group .........+2.00 to +2.50 Lo S.....+2.00 to +2.50
Chicago ......-3.00 to -2.00 cash quotes by Dow Jones | | | |
| NYMEX RBOB GASOLINE cents per gallon | | MONTH | HIGH | LOW | SETTLE | CHANGE | | APR | 229.51 | 226.75 | 228.92 | up 01.82 | | MAY | 229.39 | 226.65 | 228.78 | up 01.44 | | JUN | 228.55 | 225.62 | 227.85 | up 01.27 | | JUL | 227.67 | 224.85 | 226.94 | up 01.28 | | AUG | 226.65 | 225.32 | 225.97 | up 01.33 | | SEP | 225.43 | 222.35 | 224.79 | up 01.37 | | OCT | 214.16 | 213.40 | 214.15 | up 01.18 | | NOV | 212.90 | 212.69 | 212.49 | up 01.10 | | Estimated RB Volume day before 73,980 | | NYMEX NATURAL GAS dollars per mmBtu | | MONTH | HIGH | LOW | SETTLE | CHANGE | | APR | 4.575 | 4.458 | 4.527 | dn 0.066 | | MAY | 4.637 | 4.525 | 4.590 | dn 0.069 | | JUN | 4.700 | 4.597 | 4.659 | dn 0.070 | | JUL | 4.783 | 4.689 | 4.750 | dn 0.070 | | | Estimated Volume…day before (160,632)
Nymex statistics are based on composite Access & Day Sessions
Prompt Gasoline NYH M5 -11.00 to -10.50 RBOB -1.00 /+1.00
US Gulf M4: -11.25 to -10.75 RBOB -0.00 to +0.50
L.A. Conv Reg 227.00-228.00, N-grade Group 217.90-218.40 Chi 211.90-212.40 | |
Market Review for Monday
HE oil complex drifted higher yesterday, with crude oil prices reaching their highest level since January 11th, when prices settled at $82.52. The talk yesterday was mostly about the improving economy, and the only reason prices did not gain more was the injection of a note of reason; people started to think that oil supply and demand might not be strong enough for these higher prices. We have to agree.
There was no fresh news out yesterday, and people were talking about the February unemployment figures released on Friday. Now, as reports go, it was nothing great. We had some heavy snowstorms, which cut into retail sales and almost certainly kept retail establishments from adding workers. As a result of those storms, economists had been looking for a loss of 68,000 jobs. In the event, 32,000 were lost. More than anything else, investors found, in those numbers, hope that the March figures could show an actual increase. Like so much else over the last year, advances have come on vague hopes.
| Fuel for Thought Iran praised the Iraqi people for their courage in going to polls, despite threats from minority Sunni terror groups. The Iranian Foreign Ministry called it “an act of great courage.” It went on to say that the election could be “a turning point in the fight against occupation and dictatorship. An estimated 62.4% of Iraq’s eligible voters went t to the polls on Sunday. Turnout was especially heavy in Kurdish regions. Results will be known today. Nine US Representatives sponsored a bill that would add teeth to a 1996 law intended to punish companies investing in Iran’s oil and gas sector. The US recently awarded $107 billion in payment to US and foreign companies that have broken this law. |
These assumptions based on hope have had a poor record of showing up, even eventually. The oil markets and, to a lesser extent, the equities markets, have been higher on the triumph of hope over experience. There is a good deal of a seeming belief that the voyage is more worthwhile than the destination.
That voyage has definitely been higher. For a full 12 months now, oil prices have been rising consistently on a voyage that has precious little to do with supply or demand. The most bullish factor in this market is that refinery margins have improved recently – largely on the switch from March to April as the expiring front-month gasoline contract. That should give refineries an incentive to buy more crude oil. That, in turn, would be bullish – up to the point that it results in an overhang of crude or refined products in storage. Demand is not yet showing signs that it will be able to absorb more oil, despite the ongoing signs that an economic recovery is coming.
Our biggest worry is that higher retail gasoline (and distillate) prices will eat deeply into consumer’s disposable income. Over the last month, gasoline prices have increased by more than 40 cents a gallon.
Technicals
Oil prices were up again yesterday. Crude finished at their highest levels since January 11th, heating oil prices finished at their highest level since January 12th and gasoline prices finished at their highest levels since October 1st, 2008. Gasoline already 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 potentially higher. Refinery margins improved again.
Dollars per barrel
Above: The crack spread, which reflects refining margins, finished yesterday at $12.07/barrel, its highest level since August 18th, 2009.
April crude oil now has buy-stops over $82.41, $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 211.90-212.00, 217.55, 222.72, 225.80, 227.05, 229.08, 238.95, 249.62, and 251.50. Sell stops are under 208.50, 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 229.51, 240.10, 250.40, 252.00, 265.10, 267.85, and 270.85. Sell-stops are under 226.75, 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 bulls gained four yards yesterday on first down, making it second and six to go.
Technical Support & Resistance
Apr crude oil Support: $80.45-$80.75, $79.40-$79.50, $78.00-$78.10, $77.00-$77.20, $76.30-$76.60.
Resistance: $82.30-$82.41, $83.85-$83.95, $84.75-$84.85, $85.00-$85.15, $89.70-$89.82.
Apr heating oil Support: 208.50-208.65, 207.30-207.40, 206.00-206.20, 205.40-205.55, 201.55-201.70.
Resistance: 211.80-212.00, 217.45-217.55, 222.65-222.75, 225.65-225.80, 226.90-227.05.
Apr Rbob Support: 226.75-227.00, 224.00-224.10, 221.70-221.90, 219.00-219.15, 215.50-215.65.
Resistance: 229.40-229.51, 239.95-240.10, 250.25-250.40, 251.80-252.00, 264.90-265.10.
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 10,340 contracts on Friday, when prices advanced. That looks like new buying and would be supportive. Since March 1st, open interest has increased by 58,286 contracts as prices have gained $3.17/bbl.
Heating oil open interest grew by 2,806 contracts on Friday, when prices were higher. That looks like new buying and is supportive. There have been 18,104 contracts added since March 1st, as prices have advanced 8.20 cents a gallon.
RBOB open interest grew by 4,531 contracts on Friday, when prices were higher, which would be good new buying. There have been 29,555 new contracts added since March 1st, during which prices have gained 13.36 cents a gallon.
Natural gas open interest grew by 5,727 on Friday, when prices were higher. That looks like new buying, which would be supportive. Open interest is up 22,199 contracts since March 1st.
Friday’s Open Interest Changes:
Crude 1,332,293 up 10,340 Heat 314,751 up 2,806 RBOB 291,322 up 4,531 Nat gas 838,330 up 5,727
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 dropped 6.6 cents per million Btu yesterday as traders in New York went out for lunch and were greeted by 60-degree temperatures. They came as a surprise to a number of traders. We had been expecting moderating readings, but yesterday’s readings were positively spring-like. Now, March is notorious for false signs of spring, but the Farmers’ Almanac recommends planting peas and lettuce on Saint Patrick’s Day, next Wednesday. We have done that, and covered the crops with white gauze, and the vegetables survive through snow and frost. Still, this was the proverbial “shot across the bow.” Temperatures will warm steadily from here, and we set the clocks forward this Sunday night.
It looks to us like at least one large investment bank or fund is long crude oil and short natural gas, and we have seen steady, new buying in oil contracts and selling in natural gas since this new month began. The sudden onset of legitimately warm weather is certainly a good reason for prices to come under selling pressure, but if one looks at oil and gas through the same lens, one cannot help but be struck by the observation that oil prices are getting every bullish break in the book – while natural gas is being penalized for every minor infraction. If oil inventories had been worked off as dramatically as natural gas storage has been, this winter, crude would be trading in triple digits now.
Weather predictions are calling for warmer-than-normal readings over the next three weeks. That is how long it takes to change an existing trend, and the current trend has been in place for 16 solid months. That is about as long as most trends last. October and April, followed by March and November, are the most likely months for weather trends to change. We need to be aware of this, although it comes at a time when its impact may be minimal – except as an excuse for the bears to sell even more. We still feel that gas prices are underpriced here. Baker-Hughes reported the addition of 21 rigs last week, bringi8ng the total to 926.
In cash trading yesterday, Henry Hub prices were at $4.44-$4.51, down $0.08-$0.14 on the day (DJN). SoCal prices were at $4.58-$4.73, down $0.01-$0.04 on the day. El Paso Permian prices were down $0.02-$0.09 at $4.42-$4.48. Katy prices were down $0.08-$0.12 to $4.43-$4.49. Waha prices were down $0.03-$0.12 at $4.40-$4.47. Transco 6 was down $0.11-$0.18 to $4.77-$4.90/mmBtu, according to Dow Jones News (DJN).
Palo Verde prices were last quoted at $42.00-$45.50/mwh. Northeastern prices last traded at $31.50-$44.00. Cinergy was last at $31.50-$32.25. Ercot was last at $37.50-$38.00/mwh.
Support is at $4.45-$4.46, $4.39-$4.42, $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 $4.57-$4.58, $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 : $4.45-$4.46, $4.39-$4.42, $4.15-$4.17, $4.05-$4.08, $3.73-$3.75, $3.66-$3.68.
Resistance: $4.57-$4.58, $4.62-$4.63, $4.76-$4.79, $4.86-$4.89, $4.97-$5.00, $5.16-$5.17.
Natural gas prices were down again yesterday..
Dollars per million Btu
The crude to gas ratio settled at 18.08-to-one yesterday, its highest ratio since November 18th, 2009. Someone big has this spread on.
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 down $0.4151 at $81.46/barrel at 12.30 AM EST, this morning. April heating oil prices were down 0.67 cents to 2.0988/gallon. April RBOB prices were down 1.82 cents to 2.2710. April natural gas prices were up $0.038 to $4.565/mmBtu. We had profit-taking overnight, as overbought pressures caught up with prices. Traders were talking about the fear that China could tighten again if figures out this week are too strong. Libya said Opec will not change quotas when the ministers meet next week. DOE Expectations The table below lists the first survey results for Dow Jones, Bloomberg and Reuters. The DOE report will be released at 10:30 EST on Wednesday morning this week. Category Dow Jones Bloomberg Reuters Crude up 1.600 up 2.000 up 1.900 mln bbls Distillate dn 1.000 dn 1.000 dn 0.900 Gasoline unchanged up 0.150 up 0.300 Utilization dn 0.1% up 0.13% unchanged 
Crude oil prices were higher yesterday and they settled at their highest level since January 11th. The next resistance level is $83.95. If prices break that level, they may attack $87.00,$90.00 & $94.85. | 
Heating oil prices were higher yesterday and they broke over Friday’s high, although they could not settle above that level. There is resistance 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 are at their highest prices in two months. | |
We had profit-taking last night as traders decided to put some money away as they wait for fresh figures or events to provide new direction. The oil complex is in a bullish market, but nothing new has come out yet this week, and we had a bout of long liquidation – not new short-selling. We will focus on the oil reports this afternoon.
February Monthly Average Prices at end of this report.
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 lower yesterday, although quotes rallied later in the day and in early trading yesterday afternoon and evening. Prices are in a consolidation range between @72.30 and @74.14 euro cents.
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 loss of 13.68 points in one of the quietest and tightest ranges we have seen this year. Prices are still trending higher and yesterday did not change that.
Source: http://money.cnn.com/quote/chart/chart.html?symb=djia&sid=1643&time=6mo&Submit1=Refresh
Recommendations for Specific Market Segments
Heating Oil Distributors Heating oil prices were slightly higher yesterday, but prices broke above Friday’s high, although they did not settle above it. Nevertheless, the trend is higher and the warm weather that is kicking the stuffing out of natural gas is not landing a glove on heating oil. The bottom line is that this market wants to go higher. The early estimates are for a drawdown of roughly a million barrels in tomorrow’s DOE report. Last week, we fell short of that (drawing down 843,000 bbls). The eight-year average is a draw of 777,000 bbls. Two of the last three years have seen draws of 2.5 million barrels or more. Demand is still awful, but it has been gradually improving. It might not matter; investors have been buying oil contracts aggressively this month, based on vague hopes of an economic recovery. We continue to prefer using caps or calls, where possible, and we would be buying into any weakness we may get, here. Diesel Users We would hold our caps and will be buying more on any dips. NYH Ultra Low Sulfur Diesel.…216.55-217.05 plus 5.250 USG Ultra Low Sulfur Diesel.…212.80-213.30 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 1.50 to 2.00 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…..174.00-176.00 Prompt USG Fuel Ethanol….164.00-166.00 Quotes from 03-08-10 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 they finished at their highest price in two months yesterday. A decisive break above $84.00 would point prices towards $94.85 and possibly higher. | Prompt Jet Fuel Prices New York Harbor 216.05-216.55 US Gulf 212.05-212.55 Midwest (Group Three) 213.30-215.55 Midwest (Chicago) 213.05-213.30 Los Angeles 214.00-215.00 San Francisco 214.00-215.00 Portland, Oregon 214.00-215.00 Cents per gallon Propane Prices Mont Belvieu……….…..non-TET………$1.173750 Cents per gallon  Gasoline prices were higher again yesterday, and they settled at 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. |
February Monthly Average Prices to follow →
Average Monthly Nymex Settlement Prices
Crude Oil
The Nymex average crude oil settlement price in February was the second highest for the month on record. February was also higher than the average for all of 2009. This year’s average was 1.95 times as large as last year’s February average. It was 3.68 times the average seen in 2002.
Crude Oil in dollars per barrel
| Month | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |
| Jan | $19.73 | $32.70 | $34.22 | $46.85 | $65.54 | $54.35 | $92.93 | $41.92 | $78.40 | |
| Feb | $20.76 | $35.73 | $34.50 | $48.05 | $61.93 | $59.39 | $95.35 | $39.26 | $76.48 | |
| Mar | $24.55 | $33.16 | $36.72 | $54.92 | $62.97 | $60.74 | $105.42 | $48.06 | | |
| Apr | $26.26 | $28.14 | $36.62 | $53.22 | $70.16 | $64.04 | $112.43 | $49.95 | | |
| May | $26.95 | $28.07 | $40.28 | $49.87 | $70.96 | $63.53 | $125.46 | $59.21 | | |
| Jun | $25.55 | $30.52 | $38.05 | $56.42 | $70.99 | $67.53 | $134.02 | $69.70 | | |
| Jul | $26.94 | $30.70 | $40.78 | $59.07 | $74.46 | $74.15 | $133.48 | $64.29 | | |
| Aug | $28.20 | $31.60 | $44.88 | $64.99 | $73.09 | $72.36 | $116.69 | $71.14 | | |
| Sep | $29.67 | $28.31 | $45.94 | $65.47 | $63.90 | $79.63 | $103.76 | $69.47 | | |
| Oct | $28.86 | $30.35 | $53.09 | $62.27 | $59.14 | $85.66 | $76.72 | $75.82 | | |
| Nov | $26.19 | $31.06 | $48.48 | $58.34 | $59.40 | $94.63 | $57.44 | $78.15 | | |
| Dec | $29.39 | $32.14 | $43.26 | | | $91.87 | $42.04 | $74.60 | | |
| Open Interest | 580,793 | 600,240 | 662,484 | | | 1,361,258 | 1,189,046 | | | |
| Year | $26.09 | $31.04 | $41.40 | | | $72.41 | $99.65 | $61.80 | | |
Open interest is for the final trading day of the month above.
Dollars per barrel
Heating Oil
The Nymex heating oil monthly average settlement price for February was the second highest for the month on record. It was 1.56 times as large as the February average a year ago. It was 66.30 cents and 25% below the high February average seen in 2008. It was 3.65 times as large as the average seen in February, 2002. The February average was 3.57% below the January average.
Heating Oil in cents per gallon
| Month | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |
| Jan | 53.75 | 90.64 | 98.56 | 132.39 | 178.71 | 154.68 | 256.13 | 146.55 | 206.09 | |
| Feb | 54.48 | 107.42 | 91.28 | 133.92 | 168.66 | 169.58 | 265.04 | 127.52 | 198.74 | |
| Mar | 63.92 | 91.62 | 91.18 | 154.34 | 177.92 | 174.15 | 300.98 | 129.28 | | |
| Apr | 66.94 | 74.70 | 92.19 | 151.54 | 197.87 | 186.20 | 318.74 | 137.58 | | |
| May | 66.83 | 72.69 | 101.54 | 141.09 | 198.60 | 188.03 | 361.65 | 150.29 | | |
| Jun | 65.01 | 76.17 | 99.96 | 162.01 | 196.92 | 199.05 | 381.20 | 178.80 | | |
| Jul | 68.44 | 78.83 | 110.05 | 166.60 | 199.51 | 207.90 | 378.16 | 166.27 | | |
| Aug | 71.44 | 82.37 | 118.24 | 183.27 | 203.46 | 199.75 | 319.08 | 188.50 | | |
| Sep | 78.53 | 74.53 | 126.34 | 200.02 | 175.42 | 219.88 | 293.18 | 175.94 | | |
| Oct | 77.70 | 82.53 | 149.03 | 193.27 | 169.00 | 229.86 | 224.13 | 195.52 | | |
| Nov | 71.96 | 84.33 | 139.91 | 172.85 | 169.89 | 260.05 | 185.11 | 202.05 | | |
| Dec | 82.51 | 90.11 | 129.88 | 174.63 | 172.64 | 257.88 | 142.12 | 199.77 | | |
| Year | 68.46 | 83.83 | 112.35 | 163.83 | 184.05 | 204.11 | 283.34 | 166.51 | | |
Cents per gallon
Gasoline
The February average Nymex gasoline (RBOB) settlement price was the second highest for the month on record. It was 17.83% lower than it had been in 2008, but it was 68.76% more than it was in 2009. Americans spent $9.125 billion more on gasoline in February, 2010 than in February, 2009, after spending $11.094 billion more on gasoline in January, 2010 than they did in January, 2009. That makes the running total $20.218 billion more so far in 2010. With gasoline accounting for roughly half the barrel, Americans have paid roughly $35-$40 billion more on oil so far this year.
For all of 2009, Americans spent $116.596 billion less on gasoline than they had a year earlier. That represents a fairly large tax rebate to consumers. Of course, had prices stayed where they had been in January, 2009, the savings would have been nearly $195 billion over the course of the year. In 2009, Americans got the equivalent of a tax rebate against 2008. So far, though, 2010 has seen a $20 billion “tax increase” in the first two months against 2009.
Gasoline in cents per gallon
| Month | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |
| Jan | 57.52 | 90.58 | 99.61 | 125.87 | 175.69 | 144.47 | 236.20 | 115.05 | 204.52 | |
| Feb | 58.91 | 101.89 | 102.46 | 126.86 | 152.89 | 164.79 | 243.35 | 118.48 | 199.95 | |
| Mar | 78.71 | 101.37 | 112.28 | 154.17 | 179.24 | 195.59 | 265.88 | 138.86 | | |
| Apr | 81.28 | 86.48 | 115.69 | 158.28 | 208.60 | 216.49 | 288.23 | 144.29 | | |
| May | 78.49 | 84.12 | 137.85 | 145.18 | 208.57 | 230.13 | 322.36 | 173.61 | | |
| Jun | 76.66 | 86.67 | 119.14 | 158.32 | 212.23 | 222.63 | 342.52 | 195.48 | | |
| Jul | 81.32 | 90.60 | 127.88 | 171.54 | 226.29 | 219.24 | 328.37 | 179.79 | | |
| Aug | 78.73 | 100.25 | 124.71 | 194.60 | 201.36 | 198.32 | 294.04 | 201.81 | | |
| Sep | 79.88 | 84.60 | 126.07 | 206.54 | 156.01 | 204.01 | 262.63 | 175.87 | | |
| Oct | 82.77 | 84.48 | 138.01 | 174.59 | 149.20 | 212.71 | 178.76 | 190.35 | | |
| Nov | 71.81 | 84.84 | 127.45 | 150.33 | 157.80 | 238.57 | 123.80 | 197.59 | | |
| Dec | 83.38 | 88.80 | 112.19 | 159.03 | 163.87 | 234.53 | 96.67 | 193.32 | | |
| Year | 75.79 | 90.39 | 120.28 | 160.44 | 182.65 | 207.27 | 248.57 | 168.71 | | |
| | | | | | | | | | | |
Cents per gallon
Natural Gas
The average Nymex natural gas price for February was $1.051/million Btu higher than the average price for all of 2009. It was one of the lower February averages seen this decade, with only 2002 and 2009 averaging less. February, 2008 was 1.66 times as expensive as this past February (2010). But, this February average was 2.3 times the price seen in February, 2002.
Natural Gas in dollars per million Btu (British thermal units)
| Month | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |
| Jan | $2.191 | $5.381 | $6.273 | $6.186 | $9.136 | $6.800 | $7.991 | $5.071 | $5.599 | |
| Feb | $2.270 | $6.658 | $5.363 | $5.050 | $7.521 | $7.547 | $8.642 | $4.372 | $5.214 | |
| Mar | $3.014 | $5.786 | $5.543 | $7.048 | $6.979 | $7.222 | $9.624 | $4.002 | | |
| Apr | $3.410 | $5.359 | $5.747 | $7.151 | $7.264 | $7.629 | $10.288 | $3.561 | | |
| May | $3.564 | $5.927 | $6.357 | $6.486 | $6.373 | $7.832 | $11.381 | $3.939 | | |
| Jun | $3.259 | $5.926 | $6.331 | $7.207 | $6.398 | $7.504 | $12.785 | $3.937 | | |
| Jul | $2.942 | $5.034 | $6.057 | $7.579 | $6.222 | $6.399 | $11.068 | $3.551 | | |
| Aug | $3.092 | $4.981 | $5.472 | $9.428 | $6.988 | $6.137 | $8.301 | $3.306 | | |
| Sep | $3.570 | $4.667 | $5.220 | $12.111 | $5.219 | $6.189 | $7.486 | $3.460 | | |
| Oct | $4.099 | $4.976 | $7.371 | $13.479 | $6.630 | $7.224 | $6.729 | $4.780 | | |
| Nov | $4.040 | $4.778 | $7.609 | $11.696 | $8.000 | $7.778 | $6.699 | $4.629 | | |
| Dec | $4.838 | $6.463 | $6.828 | $13.425 | $7.160 | $7.179 | $5.788 | $5.345 | | |
| Year | $3.357 | $5.495 | $6.181 | $8.904 | $6.991 | $7.118 | $8.899 | $4.163 | | |
Copyright Cameron Hanover, 2010
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