Thursday September 17, 2009

Good evening blog readers. Zach here, with an energy market update. After yesterday's large gains across the energy market, we closed today relatively unchanged. Most of the focus in commodities has been on equities and the dollar market, both of which closed flat, but have been the catalyst to the bullish influence this week. Yesterdays DOE report came in once again with large draws in crude and builds in both gasoline and diesel. The combination of a weak dollar and bullish crude sent the energy market up, even with considerable product builds.
Diesel
Distillates stock are at their highest level since 1983. The prospect of large gain in the short term should be limited, if the rule of supply and demand is still followed. Builds this week were 2.2 million bpd, which means usage is down over a four week average from last year by about 6.8%. With all this state the market still jumped about .07 this week thus far.
Gasoline
Gas had a small build of 500,000 bpd, which isn't much of a change from last year this time. Gas has moved about .07 this week as well, unless we get losses tomorrow, look for it to shake out in the pumps over the weekend.
Crude
Crude once again this week came in with large draws, 4.7 million bpd. Crude continues to position itself in the upper $60's to mid $70's. In the short term watch for the August high of $75 and support to be found around $68.

Zach Winter