fmx | energy | connect - Morning Petrospective

Categories:

Tools

FMX 2010 Energy Expiration Calendar

follow FMX on

Data Reports:: market snapshot; energy >> crude report; energy >> options report; energy >> natural gas report; commodities >> metals report; weather >> full report

<< Crude Oil – Options Report – October 18, 2010 | Cameron Hanover – Daily Energy Hedger – October 19, 2010 >>

Morning Petrospective - October 19, 2010.

October 19 2010, 08:14

Morning Petrospective – October 19, 2010

il prices rebounded sharply on Monday, just as soon as we thought we had some conclusive technical indications that the oil complex might be headed lower. This has been an ongoing embarrassment for a number of us who have been watching this complex for most of our lives. Every time, we seem to see a fresh statistic or chart that tells us prices now want to move in one direction to the preference of the other direction, we see an immediate move in the opposite direction. On Friday, it looked like prices had made a top in this complex – to our eyes. Of course, by the end of the day’s trading, it looked like prices were back in a trading range – or might be turning higher, again.

The problems in France only seem to have gotten worse. French authorities had already asked airline operators to reduce commercial flights into Orly airport, outside Paris, by 50%, and all other traffic into other airports by 30%. This was based on fears of protests and fuel blockades, which have become commonplace over the last few weeks. Protestors blocked two main highways on Monday, and high school children reportedly clashed with police. The closure of 10 out of France’s 12 refineries by the strikes has helped buttress global gasoline prices.

And the French port of Fos-Lavera remained closed for its 22nd day leaving a backlog of 65 cargo ships at the world’s third largest oil port. Gasoline prices were higher early on Monday and they continued to advance through the day.

The US dollar was higher in trading Sunday night into Monday morning, and that brought in selling pressure for crude oil and heating oil in trading overnight on Globex. But, as the early morning and then the trading day wore on, the euro rallied strongly, before selling off late in the afternoon. In the period during which the euro rallied (the blue line falling in the chart to the right), traders were buying oil.

Equities also had a stronger session on Monday, and that also helped oil prices. By its final bell, the DJIA was up 80.91 points, and it ended the day at 11,143.69. Investors were talking throughout Monday about the increasing likelihood that the Federal Reserve will adopt some fresh measures to help the US economy, and there has been talk among Fed leaders about needing to see higher inflation rates (than might seem optimal) for a period of time, in order to get out of a liquidity freeze.

Also helping stock markets yesterday was news that the National Association of Home Builders’ index had risen 3 points to 16 in October, which would have been the first improvement in the measure in five months. The index reflects builder confidence in future sales of new, single-family homes.

The oil markets remain confused and technically uncertain. The economy seems to be recovering and then seems to be losing ground, hope or confidence. The dollar-euro is as volatile as it has been in years. We are trying to figure out which of these factors will be in the ascendant on any given day, and then figure out if the influence it will cast will be bullish or bearish. It has not been easy or terribly successful.

By Tuesday afternoon, traders will turn their attention to this week’s oil statistics.

FMX Newswire

FMX Newswire is an overnight news summary designed to meet the needs of professional energy traders. The content is to-the point, professional grade and not widely reported in the mainstream media. All sources are professional respected firms and newspapers.

Platts oil

IEA official says French gas stations running dry due to panic buying, companies using emergency stocks to ensure supply remains adequate.
BP says it will use health safety performance as the sole measure to award staff bonuses in Q4.
Sri Lanka's Ceypetco is likely to cancel its term gasoil contract with UAE-based Al-Ain International Petroleum Derivatives.
India is not considering deregulation of gasoil prices at present, despite announcing its intention to do so at an unspecified later date.

Bentek Energy

Southeast/Gulf Observer - Prices Drop as Pipelines Issue Operational Flexibility Notices.
Power Burn Analytic Report - Northeast Switching Continues to Rise as Prices Decline.
Nuclear Plant Status Analytic Report - NPCC Outages Decline As Two Units Return to Service.
Canadian Observer - Maintenance Trimms Back Production.