Gasoline stocks increases by 1.99 million barrels to 229 million barrels last week

Weekly Futures Report

01.27.10 Filed Wednesday 7:00 pm

ALL CHARTS THIS WEEK ARE Daily Bars

Last Last Week (1.20)

Mar Crude 73.67 77.57

Mar Heat 192.67 203.19

Mar XRB (Blended) 194.74 205.27

On Wednesday crude oil and its products traded to five-week lows. The

Department of Energy report indicated an increase in gasoline supplies.

The DOE stated that gasoline stocks increased by 1.99 million barrels to

229 million barrels last week. This was the highest level since March

2008. The current supply/demand profile is another indication that

demand is slack. Crude oil traded back to December lows this

afternoon. Crude oil supplies fell by 3.8 9 million barrels to 326.7

million barrels. The trade was looking for an increase of 1.5 million

barrels. The drawdown in crude stocks was apparently the result of the

closing of the Houston Ship Channel due to fog. Demand is lower by 2%

compared to last year at this time. Refinery runs came in at 78.5%, the

same level as last week. The Federal Reserve left short-term rates

unchanged which was is a market positive. Keeping rates at historic

lows is a positive because it encourages the prospect of eventual

economic growth. The idea that China is going to instruct banks to set

higher lending reserves is a market negative, however. Money flow for

crude oil is negative. Money flow for heating oil is also negative as it is

for gasoline.

Support Resistance

Mar Crude 71.50 76.00

Mar Heat 188.00 210.00

Mar Gas 190.00 202.00

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METALS

Last Last Week

Apr Gold 1085.70 1111.80

Mar Silver 16.44 17.925

April Platinum 1492.10 1626.00

With the expiration of February options, gold fell in price over the last

five sessions. The dollar has generally been stronger against most major

foreign currencies, particularly against the European Currency. On

Wednesday, the dollar rose against a basket of six major foreign

currencies as news circulated the market that the US will unwind

stimulus measures as the economy prospectively improves. With the

stock market under pressure and nervousness about the possibility of

increasing interest rates in China, the gold market has seen more sellers

than buyers lately. With interest rates at near record lows, fundamental

traders believe that inflation is only a matter of time. On the other

hand, other market participants are looking for the dollar to continue to

increase in value and this would be a metal market negative. Certainly

the recent decline in grains and oil has not been supportive for higher

metals prices. After trading as high as 1650 platinum finally rolled over

as the launch of the platinum ETF came to market.

Support Resistance

April Gold 1072.00 1115.00

Mar Silver 15.89 17.75

April Plat 1450.00 1562.00

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SOFTS

Last Last Week

Mar Coffee 133.55 139.45

Mar Sugar 28.36 29.29

Sugar succumbed to selling pressure on Wednesday as there was a

growing belief that an increase in Brazil's production may help to

alleviate shortages. It's a complicated story but part of it has to do with

sugar export quotas for the European Union. The price of sugar has

risen to such a level that some sugar production not covered by the EU

quota would be available for export without violating World Trade

Organization subsidy commitments. Global demand for sugar will still

continue to outpace production according to sugar trade sources.

Money flow for sugar is currently negative.

Support Resistance

Mar Coffee 130.00 140.00

Mar Sugar 27.50 29.80

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Last Last Week

Mar Soybeans 9.29 9.950

Mar Corn 3.582 3.68

Mar Wheat 4.836 4.974

Corn traded to a new recent low on the idea that rain in South America

will increase yields and reduce demand for US product. Argentina is

expecting significant weather for next week will relieve stress on

soybeans. Drought severely cut last year’s production but this year it

appears as though South America may be on track for a bumper crop,

particularly in soybeans.

Wheat continued to fall in price and traded to a three-month low due to

a variety of factors. The market is still reeling from the USDA crop

report while dollar strength has also been a negative. Also, political

pressures from the White House against proprietary trading have

apparently reduced the appetite for diversification into markets such as

the grains.

Support Resistance

Mar Soybeans 9.00 9.60

Mar Corn 3.50 3.720

Mar Wheat 4.75 504

Chuck Kespert

NY/NY