As we have been indicated the market traded down the our key support areas but failed to breach these levels and trade below. For the moment the market recovered a bit off of the lows on Thursday ending the day higher on a solid round of short covering. This is the third time in the last two month that prices traded down to our critical support levels and held.
The news still remains mostly supportive of a further deterioration in prices and unless something happens to change the market sentiment we still believe we will trade lower before we make any major recovery in prices.
On the week the market was mixed on prices but consistent in higher volatility. As shown the following table crude oil and gasoline are still slightly lower on the week (as of this writing) which should be no surprise as inventories of both continue in a strong building pattern. In fact gasoline stocks are now at the highest level for this time of the year since 1994. Not the other hand distillate and NG have been able to put in modest gains not the week as spots of cold weather continues to keep an edge in these markets for the moment.
With refiners continuing to cut refinery runs the week was slightly favorable for the refiners as measured by the Nymex crack spreads. The distillate crack led the way higher with the gasoline crack just slightly higher on the week.
| | | | | | | |
| | | Trading For the Week | | | | |
| | | | | | | |
| | Current | Change | Change | 1-Feb | Weekly | Range % of |
| | Price | From Thurs | For Week | Settle | Range | Fri Close |
| | 4:36 AM | | | | | |
| Mar WTI | $88.71 | $0.60 | ($0.29) | $89.00 | $4.43 | 4.98% |
| Mar HO | $2.4839 | $0.0254 | $0.0350 | $2.4489 | $0.1001 | 4.09% |
| Mar RBOB | $2.2839 | $0.0161 | $0.0005 | $2.2834 | $0.1069 | 4.68% |
| Mar NG | $8.178 | $0.076 | $0.438 | $7.740 | $0.649 | 8.39% |
| | | | | | | |
| Mar 08 Cracks | | | | | | |
| RBOB Crack | $7.214 | $0.08 | $0.27 | $6.940 | $0.82 | 11.87% |
| HO Crack | $15.614 | $0.47 | $1.72 | $13.890 | $1.61 | 11.59% |
| 321 Crack | $9.986 | $0.205 | $0.75 | $9.234 | $1.083 | 11.73% |
| | | | | | | |
We expect next week will provide more of the same as nothing significant seems to be looming to support prices but the ongoing drivers pressuring prices remain in place…weakening fundamentals (growing inventories) and a weakening economy/equities markets.
Currently prices are steady.
| Current Expected Trading Range | | | ||
| | 2/8/08 | Change | Upper | Lower |
| | | From | Resistance | Support |
| | 4:36 AM | Yesterday | | |
| Mar WTI | $88.71 | $0.60 | $92.50 | $85.25 |
| Mar HO | $2.4839 | $0.0254 | $2.5600 | $2.4000 |
| Mar RBOB | $2.2839 | $0.0161 | $2.3600 | $2.2000 |
| Mar NG | $8.178 | $0.076 | $8.250 | $7.500 |
| | | | | |
Dominick A. Chirichella
Energy Management Institute
tel 646.202.1433
fax 801.383.7510
dchirichella@emimail.org
www.energyinstitution.org
www.advancedenergycommerce.com
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