Does anyone know how to see quotes for Diesel Markets. I know a lot of firms trade off the DOE(Dept of Energy website) How would I be able to see if the offers were good against the offer I received. For example can I look at Heating plus some basis or take a look at crude plus the craxk spread??
Crude Oil Market Analysis (1/18/07) Today the market action followed yesterdayâs Crude Oil Market Analysisâ forecast and became a pay day. Crude Oil Market Analysis (1/9/07) predicted that âonce the market breaks $55.00 to touch $54.70, it will be a free fall towards $50.00-$50.40â and thus recommended the strategy of getting short at $54.75. Thereafter, the daily Crude Oil Market Analysis has steadily moved down the stop-loss level from $56.35 to $55.65, $55.00, $53.70 and finally covered the short position today at $50.40 for a $4.35 profit. Yesterdayâs Crude Oil Market Analysis (the âCOMAâ) had a bearish bias but not as bearish as todayâs market action turned out to be because the COMA could not forecast whether the crude oil import in todayâs DOE report would exceed 10.0 million barrels per day. As it turned out, last weekâs crude oil import of 11.1 million barrels per day largely contributed to the crude oil build of 6.8 million barrels. Today the market opened at $52.30 in pit trading but dropped to $50.05 once the DOE report was released. The market never regained any strength and closed at $50.48 after briefly dropping below the psychologically important $50.00. Fundamentally the market remains weak, but not so much because of the DOE report. The DOE report is not as bearish as it appears. First of all, the import of 11.1 million barrels per day last week is a one-time event and will likely drop below 10.5 million barrels per day this week. A more bullish factor is the significant drop in refinery turnaround from 91.5% to 87.9%, foreboding a drop in gasoline and distillate production in the weeks to come. Todayâs bearish news includes (1) Saudi Arabiaâs spare production capacity will reach 3 million barrels per day in February after it implements its share of the 500,000 barrels per day cut, and (2) Exxon Mobileâs Sakhalin-1 project will reach its full 250,000 barrels per day in Feb. Technically, the market remains weak, as the market has set a new 19-month low consecutively in each of the last eight trading sessions with $55.10, $53.88, $53.44, $51.80, $51.56, $50.53, $50.28, $49.90. From now on the market will likely trade in a range between $49.35 and $54.85 because the winter demand combined with expected draw in gasoline and distillate inventory will likely provide a short-term support to the market. The market shows its reluctance to drop much further both yesterday when it (CLG7) rallied almost $2.00 from a low of $50.28 to close at $52.24 and today when the March crude (CLH7) held above $51.00 even though the Feb. crude (CLG7) dropped below $50.00. The March crude (CLH7) has a support at $50.70. Result of previous trade: Short at $54.75 established on Jan. 9 was covered at $50.40 for a $4.35 profit. Strategy: Buy March crude (CLH7) at $50.90 with a stop at $49.75; take profit above $53.50. Sell March crude (CLH7) at $53.85 with a stop at $55.00; take profit below $51.00. Dr. Chen P.S. If you wish to read previous Crude Oil Market Analyses, please go to the archive at http://energyfutures.blogspot.com/
Crude Oil Market Analysis (1/19/07) Todayâs market followed yesterdayâs forecast that the market would begin to be range-bound despite having set a new low for each of the previous eight consecutive sessions, and the market had a sharp rebound. The market moved in one direction from the overnight low of $51.48 to close at $53.40 for a $1.59 gain. Currently the market is still very dynamic, as speculators play an âI-dare-youâ game. Fundamentally the market remains weak. The IEA reported on Jan. 18 that the oil demand in the 30-member OECD countries in 2006 fell for the first time in 20 years by a nominally insignificant 0.6%; however, the demand indeed decreased in 2006 in response to the record-high oil price. Oil demand in developed countries, however inelastic, finally responded to high prices when the price reached above $70 as oil consumers began to seek alternative sources of energy such as ethanol. In addition, the IMF forecasts that Nigeria will spend $1.25 billion improving the oil-rich Niger River Delta in the run-up to Aprilâs presidential election. Such spending will ease the tension in the region and bring Nigeriaâs crude oil production from 2.35 million barrels per day in 2006 to 2.53 million barrels per day in 2007. However, the demand decrease in the wake of $70 oil price may be transient, as oil consumersâ behavior will return to the old habit at a time when the oil price has gone back to $50. Moreover, with oil at $50 and corn price near record high the production of ethanol becomes unprofitable and provides a disincentive to provide an alternative source of energy. In other words, the rationales for shorting the market at $70 are no longer viable once the market falls to $50. Moreover, the economy stays healthy, as the core CPI increased by a modest 0.2% in December, and the preliminary reading of the Univ. of Michigan Consumer Sentiment Index for Jan. rises from Decemberâs to 81.3 to 98, the highest since the 103.2 reading in Jan. 2004. All these factors contribute to a battleground for the bulls and bears at $46.20-$54.86. The CFTCâs COT report shows that for the week ending on Jan. 9, the non-commercial interests had gone from a net long of 2,194 contracts to a net short of 22,358 contracts, a whopping change of 24,552 contracts amidst an increase of 53,651 new open contracts. But in the following week ending on Jan. 16 the net short interests fell by 20,326 contracts to merely 2,032 contracts amidst another huge increase in open interest by 37,088 contracts. In a matter of two week, the open interests have increased from 1,226,641 contracts to 1,317,380 contracts for 7%. In other words, as the longs are convinced that the market is going to turn at this moment, the shorts are sitting tight waiting for the next leg of downward movement. The sharp increase in open interests in the past two weeks explains the volatile market movement both intraday and during the two-week period. Likewise, when either the longs or the shorts decide to bail out, the market movement will be equally volatile. Crude Oil Market Analysisâ observation of the increasing appetite by speculators in crude oil is contrary to the conventional wisdom that big speculators have shifted their money from energy and metal to agricultural products. Nevertheless, Crude Oil Market Analysis is concerned only with the fact, not with market perception, and the fact is that both the bulls and the bears are coming in, each holding firm their respective position. Technically, despite todayâs $1.59 rebound, it is too early to say that the market downward momentum has stopped. The market needs to close above the 2006 low of $54.86 to vindicate that $50.00 is the floor in the near term. If the market cannot stay above $54.00, it will again test and break the $50.00 support. The break of the $50.00 support is not an indication of any kind. What is telling about the market direction is whether there will be a follow-through. Here Crude Oil Market Analysis will quote an earlier analysis from Jan. 9 to end todayâs analysis: âToday the market finally broke the 2006 low of $54.85 and had a follow-through selling of almost $1.00 to a low of $53.88. This $1.00 follow-through selling shows that the drop to $53.88 was not a normal panic selling triggered by stop-loss orders, but that there were new shorts coming in after the market broke the support. In other words, the market wanted to go lower.â Strategy: Sell at $53.80 with a stop at $55.05; take profit below $51.00. Dr. Chen P.S. If you wish to read previous Crude Oil Market Analyses, please go to the archive at http://energyfutures.blogspot.com/
HI DOC CHEN ... WHAT IS YOUR BACKGROUND ? WHAT MADE YOU DECIDE TO START A BLOG WITH COMMENTS ON CRUDE OIL ... AND REPOST THE BLOG COMMENTS ON ET ?
I see that there is little in-depth information on the crude oil market out there, so I have decided to provide my analysis and share it with those who are interested in the crude oil market. I invite my readers to leave their comments on Crude Oil Market Analysis either on this forum or at http://energyfutures.blogspot.com/ Dr. Chen
I agree. There is little information available to the average trader on these markets. Your analysis seems pretty astute. What is your background? Thanks for providing this interesting and helpful commentary.
I have analyzed and traded the energy market for many years for major institutions, and I continue to enjoy writing my blog on and trading the energy market. Dr. Chen