August 10, 2007
By: Adrian Brabham
NYMEX AUGUST 10, 2007
Natural Gas |
Price |
Change |
Storage Levels (Bcf) |
Prompt |
$6.84 |
$0.25 |
Current |
Change |
Last Year |
5 Year Avg |
Nov-Mar |
$8.61 |
$0.11 |
2,882 |
42 |
2,765 |
2,475 |
Apr-Oct |
$8.20 |
$0.02 |
|
|
|
|
Cal 08 |
$8.41 |
$0.05 |
|
|
|
|
The EIA reported a 42 Bcf injection which was less than expected. There was an immediate bullish reaction and the market continues to trade higher. The weather models show above normal temps in the near term and longer term forecasts. The sub $6 levels that we briefly saw a few weeks ago were a bottom and we can easily breeze through the six handle and head straight into the $7 plus range. There is a very minor tropical weather possibility in the Caribbean currently but traders are would rather go home long over the weekend. I have heard and repeated the phrase "I'd rather be long and wrong than short and fired".
-Tropical Weather Outlook
There is one area worth watching but development if any will be slow per the NHC.
Commodity Value per MMBTU
Crude Oil |
Heating Oil |
$12.29 |
14.632 |
Crude Oil |
Price |
Change |
Storage Levels (MBbls) |
Prompt |
$71.53 |
($0.06) |
Current |
Change |
Last Year |
5 Year Avg |
Nov-Mar |
$70.09 |
($0.47) |
340,395 |
-4,136 |
332,609 |
307,888 |
Apr-Oct |
$69.08 |
($0.89) |
|
|
|
|
Cal 08 |
$69.29 |
($0.77) |
|
|
|
|
Even with a bullish storage withdrawal, crude oil continues the trend lower. A look at the monthly charts shows the recent high looking like a double top. There was no follow through once the market traded the old high of $78.40 to $78.77 so we reversed and tested the $70 range. There is a lot of talk about hedge funds liquidating positions to cover equity margin calls. There may be some truth to this but it is not the only factor in the market. Technically, trading to this level was a distinct possibility once new highs subsided.
Gasoline |
Price |
Change |
Storage Levels (MBbls) |
Prompt |
$1.95 |
$0.02 |
Current |
Change |
Last Year |
5 Year Avg |
Nov-Mar |
$1.93 |
$0.00 |
202,997 |
-1,723 |
207,659 |
207,030 |
Apr-Oct |
$2.00 |
$0.00 |
Refinery Utilization |
|
|
Cal 08 |
$1.96 |
$0.00 |
91.3% |
-2.4% |
|
|
Conoco's Bayway refinery has the ability to process 238,000 bpd of crude and is down for maintenance. This is holding a bottom on gasoline prices for now. Refining capacity utilization dropped by 2.4%.
Heating Oil |
Price |
Change |
Storage Levels (MBbls) |
Prompt |
$1.97 |
($0.01) |
Distillate |
|
|
|
Nov-Mar |
$2.03 |
($0.02) |
Current |
Change |
Last Year |
5 Year Avg |
Apr-Oct |
$1.97 |
($0.02) |
127,516 |
974 |
132,442 |
127,539 |
Cal 08 |
$2.00 |
($0.02) |
Residual |
|
|
|
|
|
|
Current |
Change |
Last Year |
|
|
|
|
38,607 |
1,417 |
|
|
|
|
|
Jet Kerosene |
|
|
|
|
|
41,340 |
221 |
|
|
Heating oil continues to trade in a tight range below the common moving averages.
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Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Before trading MB Wealth recommends that you should carefully consider your financial position to determine if commodity trading is appropriate for you. All funds committed should be purely risk capital. Past performance is no guarantee of future trading results. There are no guarantees of market outcome stated, everything stated above are our opinions. |
