Gasoline stocks for the last week rises by more than 4 million barrels

Weekly Futures Report

12.02.09

Filed Wednesday 3:10 pm

ALL CHARTS THIS WEEK ARE Daily Bars    

                                                            Last                               Last Week   

Jan Crude                                         76.67                                 77.96  

Jan Heat                                            203.91                             203.61

Jan XRB (Blended Gas)                  199.60                             202.08

Crude oil was lower in early trading on Wednesday after the American Petroleum Institute reported an increase in US supplies on Tuesday evening. This suggested that demand might be lower than initially anticipated. The API stated that crude inventories were higher by 2.89 million barrels for the latest reporting week. Gasoline stocks and distillate stocks were also higher. The early indication from the Organization of Petroleum Exporting Countries is that they will keep current production levels unchanged at their upcoming meeting on December 22. At this point in time, traders see the $80 level as a cap to the current market. Until the meeting, trade observers believe the market will be range bound. Crude is up 74% for the year. Oil was higher yesterday on the back of reports showing increased manufacturing output in both United States and China. The two countries combine for over 30% of total oil consumption. Another positive for the market has been the huge rally seen in the price of gold.

The Department of Energy stated that gasoline stocks for the latest week rose by more than 4 million barrels to 214.1 million barrels and this immediately pressured prices below $2 dollars a barrel. The trade was looking for an increase of only 700,000 barrels. Inventories for crude oil rose 2.0 9 million barrels to 340 million. The trade was looking for a decrease of 400,000 barrels. Another negative for the complex was a report showing that Russian output remained at a record high for the second month in a row.

 

                                                              Support                            Resistance

Jan Crude                                             76.00                            80.00        

Jan Heat                                               202.00                         212.00

Jan Gas                                                 198.50                              208.00                                                             

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METALS

                                                            Last                             Last Week     

Feb Gold                                             1214.90                              1190.10            

Mar Silver                                           19.255                                   18.86              

Jan Platinum                                      1504.50                              1447.20

Gold continued its torrid run to new highs for the year over the past five sessions. There was one more than minor setback along the way however as Dubai attempted to restructure $56 billion worth of debt about to come due. This was one data point the market did not see coming. The news also came at a time when most traders in the United States were away on Thanksgiving holiday. Electronic bids virtually disappeared as the market attempted to figure out the situation and its ramifications. As the week wore on, it became apparent that the Dubai situation was pretty much localized and that they would be successful in rescheduling some of their debt repayments. At any rate, enough information emerged to reassure the market that the fallout had a good chance to be contained. Silver which had been treading water compared to gold finally surged towards $19.50 an ounce. Gold certainly has decoupled from a high correlation to dollar trading. Gold has become its own story primarily trading as the anti-currency. Gold is that asset which is not someone else's liability.

                                                    Support                                      Resistance

Feb Gold                                   1183.00                                 1250.00                                                         

Mar Silver                                   18.25                                            19.85                      

Jan Plat                                     1437.00                                       1519.00    

                                     *********************************

SOFTS

                                                                Last                          Last Week

Mar Coffee                                          143.85                                 138.65

Mar Sugar                                            23.12                                   22.56

Coffee attempted to rally in part due to lower-than-expected exports from India, Asia's third-biggest producer. Exports from India were down 60% over the past 11 months due to excessive rain damaging the crop. The biggest customers for Indian coffee are Italy and Russia. Coffee was also higher on the idea that supplies of high-quality beans may drop. Excess rainfall may reduce the quantity of high quality Brazilian coffee by as much as 40%. Also the perception that the dollar will remain interminably weak is a benefit to the market.

 

Sugar has been basically trading in a sideways pattern profile now. Lower-than-expected output in India is a support to prices. Sugar has failed to keep up with other commodities and their price advances.

 

 

                                                Support                                  Resistance

Mar Coffee                                  136.50                                    146.20        

Mar Sugar                                    22.05                                     23.30   

                                       *****************************************         

                                                                Last                            Last Week

Jan Soybeans                                       10.34                                10.544

Mar Corn                                              4.064                                   4.08 

Mar Wheat                                           5.76                                   5.714                                 

Soybeans have basically traded in a sideways pattern over the past five sessions after trading at its best levels since last June on signs of increased demand for animal feed. Soybeans are up 50% due to the weak dollar. Speculation that Asian demand will increase has been price positive.

 

Corn was under some price pressure due to a delay by US regulators in making a decision about ethanol usage in gasoline. There’s the possibility that the Environmental Protection Agency may increase ethanol percentages to 15% rather than current 10%.

Wheat was higher benefiting from an increase in the general asset class of commodities as investors seek a hedge against potential inflation from a weaker dollar. Wheat was higher by 20% for November on speculation that the dollar’s 1.9% decline will boost export demand making US wheat cheaper for overseas buyers.

 

                                                                Support                          Resistance

Jan Soybeans                                          10.00                                   10.85

Mar Corn                                                4.00                                    4.25

Mar Wheat                                              5.69                                    6.05

 

Chuck Kespert

NY/NY

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.