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| Weekly e-newsletter: September 25th, 2006 |
Energy markets showing continued weakness:
November crude oil opened last week at $64.25 per barrel and closed the week at $60.55. November unleaded gas opened at $1.6050 per gallon and closed at $1.5151. Nov. heating oil opened last week at $1.7775 and closed the week at $1.6929. November natural gas opened the week at $6.2000 per mBtu and closed the week at $5.8810. All of these markets are deep in oversold territory, but all are also showing high Average Directional Index numbers (ADX), which show the downtrend is very strong. Fundamentally we are seeing news that will probably pull down prices next week. Take a look at the COT graphs on the weekly charts below. Be aware that the oil companies have a large supply of summer blend, which cannot be stored. This is something they need to sell off as they prepare to produce winter blend supplies. Also, $3.00+ per gallon gasoline at the pumps probably wouldnít help incumbents in November.
Also, if you trade multiple markets and would like to see the best way to quickly scan all of the markets for potential market moves call 800-621-5271.
Commercial trader net positions
The numbers below represent the Commercial Net Traders positions taken from the weekly Commitment of Traders (COT) report released by the Commodity Futures Trading Commission each Friday. You will find a 12-month high and low with the past 2 weeks of data. To see the past 52 weeks of commercial data please visit www.pricecharts.com. Simply open Analysis under the Resource category at the top of the screen and click on the Commercial Tracker on the left side selection menu. You will find this to be a very interesting presentation of the commercial COT information.
This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A. If the current value is at a 12-month low, the cell will display a red/burgundy background. B. If the current value is at a 12-month high, the cell will display a green background. C. If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D. If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
| Commodity |
12-mo low
|
12-mo hi
|
22-Sep
|
15-Sep
|
| Cattle (feed) | -2,447 | 5,550 | 1,214 | -153 |
| Cattle (live) | -17,889 | 29,300 | 2,648 | -2,628 |
| Hogs | -4,629 | 34,725 | -2,288 | -4,629 |
| Pork bellies | -370 | 914 | – | – |
| Corn | -152,879 | 93,664 | -12,695 | 1,767 |
| Oats | -8,202 | -2,469 | -6,681 | -6,177 |
| Soybeans | 16,118 | 89,468 | 68,228 | 70,180 |
| Soybean meal | -30,476 | 31,362 | 18,456 | 31,362 |
| Soybean oil | -92,340 | 24,967 | -21,535 | -23,113 |
| Wheat | 11,526 | 65,048 | 47,457 | 39,988 |
| Orange juice | -16,473 | -1,100 | -12,197 | -13,832 |
| Coffee | -29,240 | 6,705 | 1,407 | -3,652 |
| Cocoa | -54,057 | 6,378 | -312 | -10,669 |
| Sugar | -174,808 | -25,261 | -41,380 | -30,386 |
| Cotton | -30,289 | 31,436 | 17,152 | 14,139 |
| British pound | -82,362 | 40,408 | -53,608 | -44,484 |
| Canada dollar | -77,655 | -6,953 | -6,953 | -30,255 |
| Euro FX | -121,815 | 23,395 | -64,512 | -84,604 |
| Japanese yen | -45,248 | 119,031 | 97,826 | 119,031 |
| Swiss franc | -19,555 | 83,418 | 54,947 | 42,904 |
| US dollar index | -31,022 | 10,915 | -225 | -2,937 |
| Mexican Peso | -89,024 | 31,148 | -2,074 | -7,165 |
| Australian dollar | -67,281 | 22,098 | -46,092 | -35,891 |
| S&P 500 | -79,209 | 2,401 | -26,645 | -21,726 |
| T-note -10 yr | -406,335 | 239,142 | -401,314 | -382,840 |
| T-bond -30 yr | 25,157 | 265,301 | 49,337 | 57,898 |
| Eurodollar | 96,938 | 1,198,491 | 382,667 | 96,938 |
| Crude oil | -88,086 | 70,654 | -1,917 | -21,826 |
| Heating oil | -25,943 | 8,957 | 3,617 | -3,799 |
| Unleaded gas | -40,756 | 1,913 | 1,913 | -3,445 |
| Natural gas | -80,704 | 11,801 | -64,058 | -71,414 |
| Copper | -17,098 | 11,844 | 11,160 | 10,163 |
| Gold | -212,714 | -101,925 | -101,925 | -110,695 |
| Platinum | -10,959 | -1,554 | -4,694 | -5,849 |
| Silver | -87,195 | -35,888 | -35,888 | -40,108 |
To view the entire year of commercial data please visit www.pricecharts.com.
|
|
October crude oil futures prices have extended the 2-month plunge to a total of $18 per barrel on the nearest-futures chart. The latest bearish factor, which caused an additional 3% of losses, was President Bushís statement on Sept. 18 that he would allow more time to see if diplomacy can work with Iran. Other bearish factors include rising product inventories; weak seasonal demand during the shoulder season; the lack of hurricane threats this season to the Gulf of Mexico; carry-over weakness from natural gas, which has plunged by about 40% in the past month; and technical selling and long liquidation pressure by speculators.
The latest Department of Energy weekly inventory report was net bearish with a sharp 4.1-million barrel increase in distillate inventories and a 560,000 barrel gain in gasoline inventories, although crude oil inventories fell about 2.8 million barrels. Refineries are running hard to get product out the door before seasonal shut-downs for maintenance and the change-over to refining more heating oil, which accounts for the recent rise in product inventories and the decline in crude oil inventories. Heating oil inventories have become a concern with distillate inventories soaring in the past several months to an 8-year high that is 15% above the 5-year seasonal average.
The Organization of the Petroleum Exporting Countries (OPEC) summary:
OPEC production excluding Iraq in August rose by +0.3% to 27.920 million barrels per day (bpd), which was slightly below OPEC's production ceiling of 28.0 million. OPECís overall production (including Iraq) in August fell -0.2% to 29.860 million bpd, which was only 2.3% below OPECís 28-yr high of 30.540 million posted October 2004.
Legend:
CC - consecutive closes
UTL - uptrend line
DTL - downtrend line
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