Latest As of Thursday

In other volatile day of trading the energy complex continued it trek higher after the EIA reported a larger than expected draws for crude and gasoline Wednesday. The data showed crude stocks, which were expected to build by 2.4 million barrels, instead fell by 3.2 million barrels on the week. The draw puts stock levels 17.4 million barrels below last year at 316 million barrels. However crude still remains above the 5yr average. The data showed refining runs were higher on the week by 0.67 percent to 83 percent of full capacity, still 5.34 percent below the level at the same time a year ago. Product stocks were also sharply lower on the week despite an increase in refining runs. According to the data, gasoline stocks were down 3.4 million barrels leaving stocks holding a 21.5 million barrel surplus on the year at 221.3 million barrels. Distillate stocks meanwhile also fell sharply on the week, down 3.7 million barrels to 106 million barrels, down 12.1 million barrels compared to the level at this time a year ago. On the demand-side, the EIA reported gasoline demand 44,000 barrels lower on the week to 9.3 million barrels, 128,000 barrels below last year’s level as high prices at the pump and a slumping economy continue to press demand lower.

 

Also Wednesday the Colorado State University forecast team upgraded its early season forecast today from the Bahamas Weather Conference, saying the U.S. Atlantic basin will likely experience a well above-average hurricane season.  "Current oceanic and atmospheric trends indicate that we will likely have an active Atlantic basin hurricane season," said William Gray. The team's forecast now anticipates 15 named storms forming in the Atlantic basin between June 1 and November 30. Eight of the storms are predicted to become hurricanes, and of those eight, four are expected to develop into intense or major hurricanes (Saffir/Simpson category 3-4-5) with sustained winds of 111 mph or greater. Long-term averages are 9.6 named storms, 5.9 hurricanes and 2.3 intense hurricanes per year. "Based on our latest forecast, the probability of a major hurricane making landfall along the U.S. coastline is 69 percent compared with the last-century average of 52 percent," said Phil Klotzbach of the Colorado State hurricane forecast team. "We are calling for a very active hurricane season this year, but not as active as the 2004 and 2005 seasons."

 

We expected the market to remain erratic with the market sentiment moving toward the bullish side of the equation once again. As I have said many times over the last month or so the market remains very over valued with a difficult trading and hedging pattern. We do not expect this pattern to change until the market becomes convinced that the market is actually well supplied.

 

Currently the market is trading slightly higher

 

Current Expected Trading Range				Apr 10,2008
	Thursday	Change	Upper	Lower
	as of	From Prev.	Res.	Support
	8:38 AM
May WTI	$111.01	$0.14	$112.50	$99.20
May Brent	$108.82	$0.35	$110.00	$86.50
May HO	$3.2736	$0.0391	$3.2500	$2.7100
Apr Gasoil	$1,058.50	$33.75	$1,000.00	$760.00
May RBOB	$2.7747	$0.0005	$2.9000	$2.5200
May NG	$10.200	$0.144	$10.250	$8.700

 

 

 

Salvatore Umek

Energy Management Institute

tel. 201.659.7410

cell. 201.697.5834

fax. 201.624.7164

Sal@energyinstitution.org

www.energyinstitution.org

 

 

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