China U-Turn?

September 22, 2014 04:52 AM


Last week China juiced up their banks with $81 billion in a massive stimulus but don't get used to it.

Over the weekend China's Finance Minister Lou Jiwei said that China will not make major policy adjustments due to a change in any one economic indicator. These comments have put a damper on global stock markets and have lowered commodity demand expectations just a week after the market was teased into believing that China has already started to ease. Hey wait a minute, they are already easing? Get ready for a rebound.

Dow Jones reported that Speculators added fresh wagers on rising crude-oil prices in the week ended Tuesday, according to CFTC data. Hedge funds, pension funds and others added 10,160 new bets on rising prices and slashed 6,876 bets on falling prices.

Retail gas (NYMEX:RBV14) prices are tanking though futures popped! Trilby Lundberg in the famous Lundberg Survey said that regular unleaded gasoline has dropped 9 cents over the last two weeks, to $3.37. That is a 34 cents drop over the last 13 weeks. Yet as I predicted Friday that RBOB would gain on Ultra low Sulfur Diesel. Refining issues popping up at a time when the market was oversold! Still the trend is lower. Natural Gas took a hit as weather has become neutral.

Crude oil(NYMEX:CLV14) inventories should increase this week as refineries go into planned and unplanned maintence. Crude will be up by 3 million barrels and Cushing Oklahoma up 1.5. Gas should be down 2 and distillates up 1 runs down 1.5.

Natural Gas took a hit as weather has become neutral. While everyone has a false sense of security about this upcoming winter, if we get cold early watch out! Look to buy calls.

Cocoa is still going crazy on Ebola fears. Panic buying in a market where the fundamentals are already tight.

About the Author

Phil Flynn is a senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. Phil is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets.