jackfutu18
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Be back to the energy market, this is the energies review for the week of June 7th, 2010 by Pitguru:
Very interesting week in the energy space as everything declined except the natural gas market which rallied as Euro fears heightened and the USD gained to $1.19 Vs the European currency. What really hurt the crude market was a very weak non-farm payrolls number that came out on Friday, sending crude down to $71.00 as the DOW lost more than 300 points. From Bloomberg, "Oil fell 4.2 percent on June 4 after the Labor Department said that payrolls rose by 431,000 in May. Economists projected a 536,000 gain, according to the median forecast in a Bloomberg News survey. The U.S. government hired 411,000 temporary workers for the 2010 census, accounting for the bulk of the gain in employment. Private payrolls rose a less-than-forecast 41,000. The growth in jobs in the private sector followed an increase of 218,000 in April that was revised from 231,000."
It seemed very odd that traders were buying up the July flatprice early last week to above $75.50, but that has been a great resistance point hitting that mark three times while failing to get above $76. The range now is $67.50- $75.50 and this market looks to head lower this week as European concerns still exist. Even though this short Euro is a crowded trade it did dip below $1.20 and I believe has even further downside. This will only lower the price of energies so look for this to continue.
Natural Gas has benefited from above average temperatures and a nice inventory report to blast through the resistance of $4.40 to trade up to $4.80 as short positions get squeezed out of the market. Higher temperatures signaled increased fuel demand as a heat wave hits the Northeast with temperatures in the 90's. “Last week’s gas stockpile gain was smaller than the five- year average expansion for the week of 100 billion cubic feet. It was also smaller than the increase of 124 billion in the same week a year earlier.” The Natty Gas Crude ratio is now at 14.7:1 and has been a great trade for the long Natty short crude position. I still believe this has some more room to run here.
Very interesting week in the energy space as everything declined except the natural gas market which rallied as Euro fears heightened and the USD gained to $1.19 Vs the European currency. What really hurt the crude market was a very weak non-farm payrolls number that came out on Friday, sending crude down to $71.00 as the DOW lost more than 300 points. From Bloomberg, "Oil fell 4.2 percent on June 4 after the Labor Department said that payrolls rose by 431,000 in May. Economists projected a 536,000 gain, according to the median forecast in a Bloomberg News survey. The U.S. government hired 411,000 temporary workers for the 2010 census, accounting for the bulk of the gain in employment. Private payrolls rose a less-than-forecast 41,000. The growth in jobs in the private sector followed an increase of 218,000 in April that was revised from 231,000."
It seemed very odd that traders were buying up the July flatprice early last week to above $75.50, but that has been a great resistance point hitting that mark three times while failing to get above $76. The range now is $67.50- $75.50 and this market looks to head lower this week as European concerns still exist. Even though this short Euro is a crowded trade it did dip below $1.20 and I believe has even further downside. This will only lower the price of energies so look for this to continue.
Natural Gas has benefited from above average temperatures and a nice inventory report to blast through the resistance of $4.40 to trade up to $4.80 as short positions get squeezed out of the market. Higher temperatures signaled increased fuel demand as a heat wave hits the Northeast with temperatures in the 90's. “Last week’s gas stockpile gain was smaller than the five- year average expansion for the week of 100 billion cubic feet. It was also smaller than the increase of 124 billion in the same week a year earlier.” The Natty Gas Crude ratio is now at 14.7:1 and has been a great trade for the long Natty short crude position. I still believe this has some more room to run here.
