Thursday October 22nd, 2009

Good evening blog readers. It is Energy Thursday, but seeing most of our readers farm, I going to make the assumption that readers this evening are frustrated, wet, and anxious; therefore I will keep it quick and to the point. This week has been another record setter. Crude broke the $82 dollar mark yesterday after the release of the weekly DOE report. Although there were builds of 1.3 million bpd on crude, early expectation were reported at 3.8 million bpd. The market reacted accordingly and the bulls were off to the races breaking the $82 mark, but unable to hold on as crude settled at $81.37. Draws on both gasoline and heating oil helped push both products up about .06 cents. Overall diesel has jumped at the pump almost .40 cents over the past three weeks. Today showed a little profit taking, with small losses across the board. A cent on heating oil and gas, .18 cents on crude. We discussed this last week, but refinery utilization is still way down at 81.1%, which is a slight increase .2% from last week. We are still swimming in supply across the board, but the weekly DOE report seemed to give the bulls just enough to run it up. Four week demand is up on gas 4.2%, while diesel is down 12.1% from last year. A stronger dollar helped keep larger gains at bay today, but with positive earning reports by the blue chips and the index of leading economic indicators rising 1% to 103.5, its highest level since October 2007, the bulls are still in control. The good news is with high energy, we might see more gains in the grain world. Most of us won't mine paying more for our fuel if we can see large grain gains. With the rain in the near forecast, everyone will be anxious to get back in the fields, but as Scott mentioned a few days ago, remember safety; There is always another harvest but not always a second chance to slow down and make a good decision.
Good luck out there.
Zach