Free $25 Commodity Investor Kit

Includes : Charts, Market Information, Informative News Articles, Market Alerts, Exchange Brochures, Research, Managed Futures Information, and much more!!

CONTACT INFORMATION

You can contact us by sending mail below or you can call toll free:

Phone: 800.840.5617
Phone: 312.920.0212
Fax: 855.994.4111


ADDRESS

United Futures Trading Company, Inc.
9247 Broadway
Suite EE
Merrillville, IN 46410

Resource Pages | Friend Pages

Crude traded to its best closing level in over 2 years

WEEKLY FUTURES REPORT

03.02.11

Filed 6:35 pm

Apologies for the hiatus as we moved offices last week to 75 Broad Street, one block south of the NYSE. Please visit if you can. This also partially explains the truncated version of this report.    

                                                            Last                         Last Week

Apr Crude                                         102.43                           97.28                                   

Apr Heat                                            306.20                         291.66                         

Apr Gas (Blended)                             302.50                         286.77

Crude oil traded to its best closing level in over two years as concern about the political instability of Libya preoccupied traders and grabbed headlines world-wide. Market observers believe that Libya’s oil production has been reduced by 50% as foreign oil workers have fled the country to avoid violence. Apparently, revolutionary forces opposed to Qaddafi were ready to confront forces loyal to the dictator. Libya has the largest proven oil reserves in North Africa. Political fears spread to Saudi Arabia as their benchmark stock index fell to its lowest level in two years. Although the supply for West Texas Intermediate benchmark crude in Cushing, Oklahoma more than meets demand, there is still considerable panic buying that sweeps through the market on an almost hourly basis. Momentum traders have helped to exacerbate price levels as well. Prices are now higher by 25% than levels seen last year at this time. Brent crude, more physically proximate to the Middle East, still maintains its premium over the West Texas intermediate, trading nearly $16 dollars a barrel higher. Given their differences, that one terminus is land-locked and the other isn’t, the two prices need not converge any time soon. Unless you have a great deal of trading experience and deep pockets, this spread should be avoided. On Tuesday, the American Petroleum Institute stated that crude stocks were lower by 1.1 million barrels for the latest reporting week. The International Energy Agency believes that maybe as much as 1 million barrels a day has been lost due to the internal conflict in Libya. There has also been rioting in Teheran. There have been regime changes in Tunisia and Egypt. In a preemptive action, it’s expected that the Saudis will attempt to defuse political tensions in that country by releasing reserves and this may drop prices below $100 a barrel. The Saudis are on record as saying that they are ready to satisfy incremental demand changes due to lapses in Libyan production. There may be problems with the quality of the offered crude however. The IEA is also sitting on a vast emergency reserve of oil and this could be made available at any time resulting in another sort of price shock. Money flow in crude remains positive. Money flow in Heating Oil is negative as it is in Gasoline.        

 

 

 

   

 

                                                             Support                            Resistance

Apr Crude                                             97.00                                103.41                          

Apr Heat                                               288.00                               312.00                                                 

Apr Gas                                                284.00                               309.00                        

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

METALS

                                                           Last                                      Last Week      

April Gold                                         1435.70                                 1414.00             

May Silver                                          34.645                                   33.304      

Apr Platinum                                     1852.00                                 1776.70

Gold moved higher over the last five trading sessions as investors sought out a hedge against uncertainty in the Middle East. Silver pushed to its best levels since 1980. The silver market frequently trades as if there’s a short squeeze in place.  With interest rates still at artificially low levels and the Federal Reserve apparently not seriously concerned with commodity price inflation, the metals market has been drawing increasing interest from a broad range of investors and speculators. There is a degree of counterbalance to this however as higher oil prices will hurt corporate profits, slow economic expansion  and cast a chill on retail spending by the consumer. Gasoline at the pump in Europe is brushing up against $8.00 a gallon. Gold is up 26% over year ago levels. At this juncture, it doesn’t seem as though interest rates are ready to back up substantially enough to give gold a challenge for investment flows. 

 

 

 

 

                                            Support                                      Resistance

April Gold                          1399.70                                        1451.00                                                                 

May Silver                           33.38                                              35.24                                                                                                        

Apr Plat                              1818.50                                        1873.00

 

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

SOFTS

                                              Last                                        Last Week

May Coffee                           269.50                                       269.45

May Sugar                           30.38                                           31.50

Some technicians are looking for a fall by as much as 24% in sugar in 60 days based on a traditional head and shoulders formation. Fundamentally, a unit of JP Morgan Chase took delivery of enough sugar to meet 9% of US consumption needs. 

 

 

 

                                             Support                                  Resistance

May Coffee                          269.00                                           278.00                                                                                                                                           

May Sugar                            28.50                                             31.10      

 

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

                                                Last                                     Last Week

May Soybeans                      13.942                                      13.314                                      

May Corn                              7.214                                       7.022   

May Wheat                             8.112                                      7.982 

The forecast for continuing rains in Brazil helped to support soybeans. Corn was under selling pressure on profit taking. US corn stockpiles will total 675 million bushels, down 60% form a year earlier. Soybean reserves are to be lower by 4.2 percent of estimated annual demand. Until new crop is successfully in the ground, look for continued volatility and high seas. 

 

 

 

 

 

 

                                                      Support                         Resistance

May Soybeans                             13.45                                   14.25    

May Corn                                     7.05                                     7.43                                   

May Wheat                                  7.84                                     8.36  

 

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.