Energies - Nov 16,2009
Sunday, November 15, 2009
by PitGuru.com Authors of PitGuru.com
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The Energies Pit Review For the week of November 16th, 2009 By PitGuru Daniel Cronin Crude oil fell last week as inventory levels built higher than expected and traders took profits in front of the $80/barrel number. Crude Oil was down 1.9% last week, breaking the significant resistance of $76.50 to trade below $76.00 for the first time in a month with inventories increasing 1.75 million barrels. Gasoline was the strongest of the energy products but still faltered, -.9% to $1.9162 and Heating Oil faired worse by moving down 2.4% to $1.9661. Natural Gas followed with another dismal performance trading below $4.40 in the Dec contract, which was down -4.6% looking to test that $4.00 level again. Crude oil fell on the back of the inventory report and the weakening in the wti spreads. I believe that one should look to buy the pullbacks here as the USD continues to get weaker against other major currencies. It seems as though investors still want to own the crude up at $75, so look to this as the next big support. If the USD gets hit hard again this week the market could see Oil test $80 again so you need to pay attention to the greenback. WTI spreads look a bit oversold on the downside but you must watch out for the December contract when it goes off the board in the next week. I believe this Dec contract has been keeping prices afloat here so a pullback on the month change wouldn't be surprising. OPEC, producer of more than 40 percent of the world’s crude oil, will meet on Dec. 22 in Luanda, Angola to discuss output targets after agreeing to leave them unchanged at the last three meetings. The group’s compliance with the production cuts slipped to 60 percent in October from 62 percent in September. I believe OPEC will keep production unchanged just like the last 3 times as they like the Crude price where it is right now. 
Past performance is not indicative of future results.
***chart courtesy Gecko Software
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About the author
Daniel Cronin - PitGuru.com's Energies & Metals Guru Daniel Cronin has spent years on the floor of the Nymex as part of one of the largest energy floor brokerages in the business. His extensive experience stems from not only his Pit background but also through intense studying and implementation of complex technical analysis and market trading techniques via the mentorship of the now retired Ralph Acampora. Mr. Cronin brings subscribers a rare combination of book smarts and real world trading experience in one of the most volatile market sectors in the futures industry. Matthew Pierce - PitGuru.com's Grains Guru Mr. Pierce is a unique acquisition for Futures Press Inc. in that he has an unmatched level of real hands-on experience within the industry in addition to his floor trading expertise and top notch education at the University of Illinois College of Agriculture. Matthew has literally cultivated the perfect professional career as a grain expert by working with the industry's most recognizable companies such as Cargill, LaSalle Group, Conagra, Walsh Trading Inc. and many more. In addition to trading on the floor of the Chicago Board of Trade, Mr. Pierce writes what many in the business believe to be the best kept secret amongst trading reports available in the industry. Jurgens H. Bauer - PitGuru.com's Softs Guru Jurgens owns and operates his own order execution firm on the ICE trading floor. He has been a member since 1987. His firm, Jurgens Bauer and Associates, specializes in executing option orders for a wide array of customers and a variety of industry participants, including individual speculators, funds and members of the trade. While Jurgens has been an active member of the trading community he has also spent time since 2000 working at raising awareness of environmental commodities, educating industry professionals on emissions trading, brokering transactions between private counter parties and developing SO2 and NOx contracts for the NYMEX. Frank LaMantia - PitGuru.com's Financial Guru Soon to be Dr. LaMantia, Frank is not only one of the most educated traders on Wall Street, but also maintains an industry resume of substance and depth. Frank has worked extensively on an Institutional preferred stock syndicate desk, as a government bond specialist, and as a financial advisor all the while achieving multiple licenses in the finance field. With an extensive and impressive client list (including Citibank, Bear Stearns, Lehman Brothers, AG Edwards, Mesirow, UBS, and numerous Hedge Funds), Mr. LaMantia brings his one-of-a-kind background to his current occupation of full time trader.
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