Thursday October 8, 2009

Good evening Elburn Coop blog readers. Once again it is Thursday, which means... Lets talk Energy. It appears we are still in the same cycle we have seen for the past couple months. Choppy day to day trade with about .10 cents of weekly volatility in product and $3.00 volatility in crude. Crude oil rose to a two week high today of $71.69, as the dollar declined and stocks rose on news that the number of Americans filling jobless claims dropped. New applications dropped to the lowest levels since January, but overall unemployment rose to 9.8%. The dollar dropped to a 14 month low, against a basket of currencies. It is thought that without the jobs data we would of only seen the energy market jump half of what it did. It appears the bulls ran with the data and we saw a .06 cent gain in both products today. The question is will there be positive news tomorrow to continue or will the bears pull things back a bit? What will the dollar do? What will the equity markets do? Overall we will most likely stay in the same range we have seen, choppy but steady numbers range.
Crude Oil
Crude Oil this week showed a draw of million bpd. It was not much of surprise with decreased imports and builds in product. It is an interesting tactic to increase production in a weak market, but it does create an illusion of increased demand any time a draw is recorded. Look a little further and you see a huge build in gas, I wonder what they turned the crude into?
Gasoline
Gas showed .05 losses yesterday as the DOE report showed builds of 2.9 million bpd. Expectations were a build of 1 million bpd, so needless to say it had a negative impact on prices. But short term losses came back today to close .06 cents higher as if yesterday didn't happen. Over all 4 week demand is up 6.2% percent from last year, giving cause to increased prices. Look to pay a little more at the pump by the weekend.
Diesel
Diesel saw gains of .065 cents today, which trump yesterday's .03 cent losses. As we have seen over the past couple of month in the market or you have seen as you drive around, not much is going on out on the road. Diesel's four week demand is down 9.5% from last year this time. The DOE reported builds of 700,000 bpd in product confirming yesterdays losses. It seems the market was a little over done today with .065 cent gains, look to get a little back tomorrow. If the market doesn't correct itself tomorrow,expect to pay more for your diesel as you get in the fields.

Zach Winter