Thursday April 8th, 2010

Energy
This weeks crude market has been one of balance. Monday and Tuesday provided a boost, but after a bearish DOE report things have cooled off a bit. We have seen two consecutive days of small losses, totaling about a buck fifty. Crude closed today at $85.39, well within the current trading pattern. US crude inventories rose for the 10Th consecutive week touching levels not seen since June of 09. This weeks DOE report showed builds of 2 million on crude, draws of 2.5 million on gas and an unexpected 1.1 million build on diesel. Refineries were cracking this week, up 1.9% to 84.6%, which hasn't been seen since October of 09.
The last two days of energy loss has been due to pressure from the dollar. As the dollar gains it reduce investment appeal for those using other currencies. Also poor job data, balanced positive retail news today, as 31 chain stores reported 9% sales gains, the largest single month gain since March of 1999.
The two day losses on actual end user product have been minimal in comparison to the recent run up. Retail pump prices on fuel are climbing and not as fast as the actual spot or rack market. Retail fuel margins nation wide dropped last week by about 50%, as retails try to blunt the blow of recent gains. So while the market has dropped the last few days by about .03 cents, don't expect to see it at the pump, as replacement fuel loads are considerably higher than just one weeks ago. The short term fuel outlook is still bullish, don't be surprised to see crude make a considerable run between now and Memorial Day. Product will most likely follow suite, irregardless of short term demand numbers.
It sounds like this weekend will provide some sunshine and warm 70 degree weather. Still a few days until the fields dry out, so after you get the planters in line, be sure to hit your local golf course and help stimulate there early spring economy. Have a great weekend.
Zach Winter