DOE Weekly Inventory Report

On April 4, 2012 by TradingDesk

CLICK HERE for this week’s Department of Energy inventory report.

The Selling Continues this Morning

On April 4, 2012 by TradingDesk

The minutes of the most recent FED meeting were the big story in the market yesterday, as so many have learned to trade simply on whether or not there will be cheap money available to do so. Once it was obvious that the FED governors were not planning on adding more liquidity at this time, equity and commodity markets sold off sharply.

The selling has continued this morning, as Asian and European markets react negatively to the FED’s stance, and following disappointing debt auction in Spain, which has become the answer to many for the “who’s next after Greece?” question.

RBOB continues to outperform, managing to hold onto slight gains despite both WTI and HO dropping nearly 1%. The API report last night showed a large build in crude, and draws in products, which has helped push RBOB cracks their record high of $40/barrel.

This morning’s ADP report showed another 200k increase in jobs last month, which wasn’t strong enough for some hoping for economic recovery in the US, and not weak enough for others hoping for more FED easing. This private report has been a decent predictor of the BLS report due out Friday, but since both human and electronic markets will be closed for Good Friday, don’t expect much of a reaction from traders either way.

CLICK HERE for a PDF of today’s chart

Early Selloff Turns Into Furious Rally in Energy Prices

On April 3, 2012 by TradingDesk

Q2 started off with a memorable head fake, as a fast early morning sell off turned into a furious rally in energy prices. While there were numerous headlines that were blamed for the action, the reaction in other asset classes was much less dramatic, suggesting that a fresh round of fund dollars being invested into commodities to begin the quarter was a major contributor.

With products now trading more than a dime above where we were this time yesterday, the bearish technical picture that was shaping up has been significantly damaged. RBOB remains the strongest technically, now trading on its high for the year, and only 6 cents from its 2011 high. With RBOB calendar and crack spreads setting multi-year highs, despite news that buyers have been emerging for east coast refineries, it seems clear that the contract is determined to keep its pattern of not peaking until April/May intact.

Stocks are opening the day in the red in quiet trade. It appears that many are waiting for the Fed minutes, released at 1pm today, to take on any major positions.

CLICK HERE for a PDF of this morning’s charts


For the rest of us who didn’t win the lottery…

On April 2, 2012 by TradingDesk

For those who didn’t retire with their Mega Millions ticket, Q2 is starting off on a somewhat weaker note. After an early pop during the overnight session – pegged to a positive reading in the official Chinese PMI – equity and commodity markets have pulled back following weak PMI reports from across the euro zone, and from the non-official Chinese report. The Euro is also slipping as European unemployment hit a 15 year high, and as rumors swirled about the ability of the PIG countries being able to collateralize their debt.

While a few hours of overnight trade do little to create a trend in the market, technical studies in both stocks and energy futures are rolling over into bearish territory. WTI is leading the way lower, after having broken key support last week, and now is targeting double digits. HO is currently testing key support at $3.15 which will confirm or deny a 2 month old rounding top pattern, with a break here targeting a move to $3.00. RBOB continues to show relative strength, but even the great gasoline rally of 2012 is beginning to show cracks, peg $3.25 as the must-hold value for gasoline bulls.

 CLICK HERE for a PDF of this morning’s charts

Bailouts, Anyone?

On March 30, 2012 by TradingDesk

Commodity and US equity markets are slightly higher to start the last trading day of a very strong Q1. Prices are buoyed by a rally in the Euro after the European “firewall” bailout fund was allegedly expanded, which is good because Greece also announced that it would likely need a third bailout.

Markets have popped a bit more in the past few minutes after Personal spending for February increased by .8%, the most in nearly a year, although incomes grew by only .2% failing to meet estimates roughly twice as large.

WTI broke a key technical support area yesterday, which set off a rapid bout of selling across the energy complex and ended with both HO and WTI hitting their lowest levels of the month. RBOB managed to shrug off most of the selling, and remains the strongest technically as we approach the seasonal peaking window for gasoline prices in April/May.

As we head into the second quarter, the main issues that will impact prices have not changed. The world’s central bank policy decisions to manage a challenged financial system such will dictate much of the action in risk assets. Energy fundamentals remain in a stare down between sluggish demand, and fears of supply disruptions in the Middle East.

CLICK HERE for a PDF of this morning’s charts.


A Trio of Reports Knock Oil PRices Lower

On March 29, 2012 by TradingDesk

A trio of reports Wednesday knocked oil prices lower as rumors of another multi-national SPR release and an actual 7 million barrel build in US stockpiles, reminded traders that there is plenty of oil available despite what is or isn’t happening in the Middle East. Refined products fared better as stockpiles drew thanks to a pickup in weekly demand and export figures.

Products are gaining this morning, following European grades higher, despite WTI ticking lower. The WTI/Brent spread has broken below -1900, which should set up a test of the year’s lows at -2100.

US Equities are also following their European counterparts lower so far. The latest revision of GDP showed growth unchanged from the last estimate at 3%. Weekly jobless claims were much higher than estimates, as initial claims rose 9,000 and last week’s estimate was revised higher by 16,000.

CLICK HERE for a PDF of this morning’s charts.


Stocks Pulled Back From Monday’s Big Gains, While Energy Remains A Political Football

On March 28, 2012 by TradingDesk

Stocks pulled back from Monday’s big gains yesterday morning, following several soft economic data points. Energy prices were slipping in sympathy, then the selling picked up following a Bloomberg headline which suggested the White House was prepared to announce a release of US SPR oil stocks to win an election try and lower prices.

Not to be out-done, this morning a French newspaper announced that the country is in contact with Britain and the US, and that a release of strategic stocks was a matter of weeks away. Prices have fallen on the news, but as has become the pattern of late, are already bouncing as the rumors are refuted. It’s impossible to say what the politicians have decided, but looking to last year’s coordinated effort as a guide, it does seem safe to say that any impact on prices will be short lived.

The US Commodity Futures Trading Commission (CFTC) also issued an advisory, reminding traders that it would still be enforcing position limits on speculative positions. The motive for the warning wasn’t stated, but the resultant short-term selling that resulted shows just how much hot money there is influencing prices these days.

Meanwhile, in the physical energy market, last night’s API report showed builds in Crude and Gasoline stocks, and a draw in distillates. The DOE report is expected to show the same at 9:30 today, with the hotly debated, historically weak, demand figures surely to draw the most attention. The technical outlook remains stuck in neutral.

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Hints Of More Money Printing

On March 27, 2012 by TradingDesk

Hints at more money printing from Helicopter Ben Bernanke sent stock and commodity prices soaring Monday, as cheers for free money and fears of resulting inflation brought out buyers from all sides. Energy prices were relatively subdued, as the contracts struggle to deal with a weakening fundamental outlook and range-bound technical trading.

Prices are slipping a bit this morning, following the Euro lower after Spain and Italy sold short term debt, but had to pay more to do so. The moves are unimpressive so far, with many apparently waiting for a raft of economic data this morning to decide the state of the economy – or, more importantly – the FED’s reaction to it.

CLICK HERE for a PDF of this morning’s charts


One Headline Triggers A Variety of Mechanical Trades

On March 26, 2012 by TradingDesk

Friday’s trading session was dominated by a single headline suggesting that Iranian oil imports had dropped sharply in March. On its own, this wasn’t really news, but the headline triggered a variety of mechanical trades, sending WTI up $3 in less than 3 minutes. RBOB rose 7 cents in the first few minutes following the headline, setting new highs for the year, only to fall 6 cents in the next 5 minutes.

Prices have risen again this morning, all in the past 20 minutes, as a speech by Ben Bernanke has traders anticipating more free money courtesy of the FED. RBOB is breaking out of its March trading range, to the upside, and is currently less than 8 cents from last year’s high. WTI and HO look less bullish technically, but still appear set to test the upper end of their trading ranges, after failing to break through the bottom end last week.

The NYMEX has announced plans to keep the HO futures contract with an ULSD spec beginning next April, scrapping plans to convert to a new futures contract once the heating oil specs expired.

 CLICK HERE for a PDF of this morning’s charts

A Quiet Overnight Session of Trade

On March 23, 2012 by TradingDesk

It’s been a quiet overnight session of trade, after yesterday’s broad “risk off” selling. Asian markets remain cautious as rumors of political unrest in China keep buyers on the sidelines waiting for more news.

In the US the news seems to be sharply focused on energy prices, and what the politicians can do to solve the problem. After a one day rally on news that the lower half of Keystone would be expedited, the WTI/Brent crude oil spread reversed course, suggesting traders aren’t buying story. Refined products tested the lower end of their trading ranges, but bounced late in the day yet again, proving that indecision reins in energy markets for now. Our recent pattern has been to push higher ahead of the weekend, and without any major economic headlines expected today, look for that trend to continue.

 CLICK HERE for a PDF of this morning’s charts