Oil inventories increase significantly

The tropical weather situation is extremely active with two major hurricanes sitting in the eastern Atlantic and a newly named Tropical Storm hovering around the Yucatan Peninsula. None of these storms are a threat to the oil and Nat Gas producing region of the US Gulf Coast as shown in the following graphic (5 AM NOAA update). However Tropical Storm Karl could have an impact on oil producing and export operations out of Mexico over the next several days. As shown in the following graphic Karl is clearly heading to the main part of eastern Mexico and is currently projected to strengthen to hurricane status just prior to making landfall around Saturday morning. Although Karl could have an impact on oil operations in Mexico the impact is not likely to be overly severe or very long lasting as Karl will not be a major storm.

Both Igor and Julia are projected to turn into the northern Atlantic and definitely out of harm’s way of the sweet spot in the Gulf of Mexico. Also, neither of these storms is expected to actually threaten any part of the US East Coast. They are both major, category four storms that both have to potential to strengthen into category five storms. Igor is currently on a path to make landfall over Bermuda and then remain in the Atlantic while Julia does not appear to be heading anywhere near land anytime soon. At the moment, the tropical weather activity remains a concern but not one that warrants investing any trading capital at the moment.

My individual market views are detailed in the table at the beginning of the newsletter. I have made some minor adjustments to my market view rankings but am keeping my bias at neutral for today. I view the oil complex as moving back toward an overall bearish view but I am waiting on today’s inventory report before making any final adjustments. If the EIA data is in sync with the API crude oil build I would expect a rather strong sell-off in oil prices as the last $3/bbl or so move to the upside for WTI was mostly related to the Enbridge pipeline shutdown that now is expected to be relatively short lived and restarted by the end of the week. I addition we are seeing a bit of a transition in the market sentiment in the financial sector as the dollar firms and equities values are beginning to drift lower. So what started as a firm upside price week for oil may quickly end the second half of the week under pressure…especially if today’s EIA inventory report is the least bit bearish.

Current Expected Trading Range

Expected Trading Range

9/15/10

Change

Low

High End

From

End Support

Resistance

7:12 AM

Yesterday

Oct WTI

$75.68

($1.12)

$71.00

$84.50

Oct Brent

$78.57

($0.59)

$70.00

$80.00

Oct HO

$2.1162

($0.0126)

$2.0500

$2.1500

Oct RBOB

$1.9496

($0.0194)

$1.8000

$2.0000

Oct NG

$3.941

($0.025)

$3.500

$4.000

10 YR Treasuries

125.28

(0.17)

118.00

128.00

Dow Futures

10,501

(29)

10,000

10,850

US Dollar Index

81.845

0.506

80.150

85.000

Euro/$

1.2971

(0.0052)

1.2400

1.2900

Yen/$

1.1753

(0.0301)

1.1400

1.2000

Best regards

Dominick A. Chirichella

dchirichella@mailaec.com

Energy Market Analysis is published daily by the Energy Management Institute 1324 Lexington Avenue, # 322, New York, NY 10128. Copyright 2008. Reproduction without permission is strictly prohibited. Subscriptions: $129 for annual orders. Editor in Chief: Dominick Chirichella, Publisher: Stephen Gloyd, Editor Sal Umek.

EMA has authorized Futures to publish its report once a week on Wednesday prior to the EIA release. For information on how to receive the report everyday look below.

PH: (888) 871-1207

Email info@energyinstitution.org

Subscribe here Free Trial Here

Information and opinions expressed in this publication are intended to provide general market awareness. The Energy Management Institute and the Energy Market Analysis are not responsible for any business actions, market transactions, or decisions made by its readers based on information published in this report. Readers of the Energy Market Analysis use this market information at their own risk.

This message and any attachments relate to the official business of the Energy Management Institute ("EMI") and are proprietary to EMI. This e-mail transmission may contain information that is proprietary, privileged and/or confidential and is intended exclusively for the person(s) to whom it is addressed. Any use, copying, retention or disclosure by any person other than the intended recipient or the intended recipient's designees is strictly prohibited.

<< Page 3 of 3
About the Author
Dominick A. Chirichella

Energy Market Analysis is published daily by the Energy Management Institute 1324 Lexington Avenue, # 322, New York, NY 10128. Copyright 2008. Reproduction without permission is strictly prohibited. Subscriptions: $129 for annual orders. Editor in Chief: Dominick Chirichella, Publisher: Stephen Gloyd, Editor Sal Umek.

EMA has authorized Futures to publish its report once a week on Wednesday prior to the EIA release. For information on how to receive the report everyday look below.

PH: (888) 871-1207

Email info@energyinstitution.org

Subscribe here Free Trial Here

Information and opinions expressed in this publication are intended to provide general market awareness. The Energy Management Institute and the Energy Market Analysis are not responsible for any business actions, market transactions, or decisions made by its readers based on information published in this report. Readers of the Energy Market Analysis use this market information at their own risk.

This message and any attachments relate to the official business of the Energy Management Institute ("EMI") and are proprietary to EMI. This e-mail transmission may contain information that is proprietary, privileged and/or confidential and is intended exclusively for the person(s) to whom it is addressed. Any use, copying, retention or disclosure by any person other than the intended recipient or the intended recipient's designees is strictly prohibited.

Comments
comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome