A shortened holiday week that has proved to be very interesting is coming to an end. In spite of yet another bearish indicator (yesterday’s inventory report) prices are firm this morning (so far) after a mostly down day on Thursday. Not much new since yesterday other than the market sentiment still remains biased to the upside for all of the reasons I have been discussing all week.
On the week the prices gained across the board with HO leading the way higher. Crude was second in the race with gasoline lagging way behind. In fact gasoline is only up marginally on the week as inventories of gasoline continue to swell and are now above last year’s record level by over 7 million barrels. On the refinery side the gasoline crack lost ground on the week as gasoline lagged the rest of the market higher. Even though the Ho crack gained on the week the widely followed 3-2-1 crack lost some of its value on the week.
Finally on the volatility side of the equation crude oil exhibit the highest level of volatility (outright) as measured by the percentage change in the weekly trading range. We expect this to continue into next week.
| | | | | | | |
| | | Trading For the Week | | | | |
| | | | | | | |
| | Current | Change | Change | 15-Feb | Weekly | Range % of |
| | Price | From Thurs | For Week | Settle | Range | Fri Close |
| | 6:26 AM | | | | | |
| Apr WTI | $99.00 | $0.77 | $3.55 | $95.45 | $5.74 | 6.01% |
| Mar HO | $2.7655 | $0.0274 | $0.1186 | $2.6469 | $0.1228 | 4.64% |
| Mar RBOB | $2.5347 | $0.0127 | $0.0409 | $2.4938 | $0.1382 | 5.54% |
| Mar NG | $8.822 | ($0.069) | $0.162 | $8.660 | $0.386 | 4.46% |
| | | | | | | |
| Apr 08 Cracks | | | | | | |
| RBOB Crack | $13.770 | ($0.37) | ($1.15) | $14.917 | $1.59 | 10.66% |
| HO Crack | $16.265 | $0.37 | $1.47 | $14.790 | $1.86 | 12.58% |
| 321 Crack | $14.593 | ($0.127) | ($0.28) | $14.875 | $1.679 | 11.29% |
| | | | | | | |
For all of the many reasons we have been elaborating on over the last two week the market is still very overvalued with more factors suggesting lower prices rather than higher prices. However, the market is not viewing it that way as prices continue to stay firm. Expect next week to remain in this erratic trading pattern.
| Current Expected Trading Range | | | ||
| | 2/22/08 | Change | Upper | Lower |
| | | From | Resistance | Support |
| | 6:26 AM | Yesterday | | |
| Apr WTI | $99.00 | $0.77 | $100.00 | $85.25 |
| Mar HO | $2.7655 | $0.0274 | $2.8000 | $2.4000 |
| Mar RBOB | $2.5347 | $0.0127 | $2.6500 | $2.2000 |
| Mar NG | $8.822 | ($0.069) | $9.250 | $8.250 |
| | | | | |
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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