Crude oil pushed to its best level in seven weeks

Weekly Futures Report

03.03.10 Filed Wednesday 7:20 pm

ALL CHARTS THIS WEEK ARE Daily Bars

Last Last Week (2.17)

Apr Crude 80.87 80.34

Apr Heat 209.37 206.21

Apr XRB (Blended) 224.78 221.09

Crude oil pushed to its best level in seven weeks despite a report from

the Department of Energy that was initially viewed as slightly bearish.

Prices did reach their best levels since October on a greater appetite for

risk trades. Refinery utilization rates increased and players fixed on this

data point to make a bullish argument. Otherwise, crude inventories

actually increased by 4 million barrels versus an expected build of 1.2

million barrels. Gas stocks also increased by 773 thousand barrels

against a previous expectation of 300 thousand barrels. Traders said

that the increase in refinery runs was due to an improvement in profit

margins, or the crack spread. Demand was said to be improving with

usage up 3% from a year ago at this time. Crude stocks stand at their

highest levels since August. Another positive aspect for the market was

a weaker dollar as Greece announced a 6.6 billion dollar austerity plan

to address its financial problems within the European Union. The

Institute for Supply Management came in better than expected.

Support Resistance

Apr Crude 77.00 82.30

Apr Heat 200.80 212.20

Apr Gas 212.50 225.80

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METALS

Last Last Week

Apr Gold 1143.30 1097.20

May Silver 17.32 15.96

April Platinum 1583.50 1507.30

Gold lifted to a six week high on Wednesday as a weaker dollar and

stronger values for oil lent support. Traders believe that a sovereign

debt crisis will drive money into gold as an anti-currency. There are

hopes that a Greek austerity plan will assuage EC concerns about

Greek indebtedness. The Prime Ministers for Germany and Greece will

meet at week’s end. Also, Russia apparently wants to increase gold

reserves due to declining confidence in currencies. Money flow in silver

remains positive. Copper maintained its prices chiefly due to the

Chilean earthquake.

Support Resistance

April Gold 1107.00 1153.00

May Silver 16.05 17.60

April Plat 1533.00 1600.00

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SOFTS

Last Last Week

May Coffee 132.00 132.85

May Sugar 22.01 24.40

Coffee was flat over the past five sessions. Brazilian production which

accounts for 14% of world production may be lower than expected due

to weather concerns. At the same time, coffee exports from India which

is the world’s third largest producer are 33% higher. India’s

production may be 10% better than last year’s yield. Money flow in

coffee is positive.

Money flow in sugar remains negative. Prices in India dropped to a two

month low this week as domestic production increased by 5.5%. Sugar

Support Resistance

May Coffee 130.00 134.00

May Sugar 20.50 23.70

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Last Last Week

May Soybeans 9.634 9.63

May Corn 3.866 3.862

May Wheat 5.156 5.136

Soybeans were steady as the belief that economic expansion would

result in better demand. Money flow remains positive. Higher oil prices

were also a positive influence.

Wheat was influenced by dollar trading. Money flow in wheat remains

negative, however. Some traders believe that the USDA will

downwardly revise its estimate for pre-harvest stockpiles.

Corn held steady as well over the past five sessions. The belief is that

excess moisture due to snow melt may flood fields and delay planting. A

lower close on Thursday could throw the trend to negative.

Support Resistance

May Soybeans 9.52 9.745

May Corn 3.72 4.00

May Wheat 5.00 5.20

Chuck Kespert

NY/NY