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Crude falls from its best levels in over 27 months

01.13.11

Filed 7:45 pm

Last Last Week 01.05

Mar Crude 92.18 91.42

Mar Heat 262.47 251.75

Mar Gas (Blended) 247.34 245.17

Crude oil fell from its best levels in over 27 months during trading on

Thursday as there was a larger than forecast increase in weekly jobless

claims. The weekly claims were termed disappointing as they were at

their highest level since October. Another negative for the market was a

drop in demand. Demand for oil products dropped 8.2% over the past

two weeks. Crude demand was lower by 0.5% to 19 million barrels a

day for the last reporting week. OPEC says they were going to reduce

shipments of crude as demand from Asia slows. A positive influence was

the surge in the euro currency has debt auctions by Portugal and Spain

went off smoothly. Another positive for the market has been a leak in

the Alaskan pipeline. There will be a shutdown of the Trans Alaskan

system this weekend to install a bypass.

Due to the storms that hit the Northeast of the United States this past

week, expect to see a buildup in gasoline stocks and a drawdown in

distillate stocks.

Crude oil continues to trend positively.

 

Support Resistance

Mar Crude 91.17 94.30

Mar Heat 258.50 265.00

Mar Gas 244.00 250.00

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

METALS

Last Last Week

February Gold 1373.80 1373.70

March Silver 28.775 29.19

Apr Platinum 1804.00 1740.10

Gold fell sharply in price on Thursday as concerns about the spread of

the European debt crisis were relieved as a result of successful auctions

by Portugal and Spain. Borrowing costs for Portugal dropped and

demand rose when they sold bonds with a 10 year duration. Demand for

Spanish bonds also rose as the ECB emerged as a buyer of these debt

securities in the secondary markets. All of this reduced the need for a

hedge, a hedge against event risk that gold was providing. It should be

remembered however that the European debt crisis is far from over.

For example, Portugal did raise $1.97 billion successfully but their

ultimate need is for $20 billion. In front of the two sovereign nation

auctions Gold rallied on a hedge bet that something might go wrong.

The successful auction completion triggered the gold sell off. The EC

may trade as high as 135 then falter on renewed European debt

concerns and this would be a gold market positive.

Support Resistance

February Gold 1365.00 1396.00

March Silver 28.00 30.00

Apr Plat 1746.50 1837.00

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

SOFTS

Last Last Week

March Coffee 237.50 233.00

March Sugar 32.06 32.20

Support Resistance

March Coffee 223.20 244.20

March Sugar 29.59 33.46

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

Last Last Week

March Soybeans 14.16 13.934

March Corn 6.424 6.192

March Wheat 7.834 8.082

Corn surged by over 1.3% on Wednesday to the highest levels since July

2008 after the United States Department of Agriculture predicted that

production dropped 4.9% last year. This will leave supply levels at their

lowest levels in 15 years. The report also showed declining US and

global inventories of soybeans. Wheat supplies are also shrinking in the

United States after last year's harvest and the continuing dry weather

threatening winter crops in key growing areas in the Great Plains.

Higher prices though have resulted with sluggish export demand. The

old adage is that the cure for high prices is higher prices. Money flow

remains positive for the grains.

.

Support Resistance

March Soybeans 13.35 14.60

March Corn 5.93 6.50

March Wheat 7.56 8.04

Chuck Kespert from 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.