If at first you don't succeed try, try again. Once again it is proven that persistence pays off and maybe finally it is getting ready to pay off big time for the struggling cartel - OPEC.
OPEC has been trying to push oil up a hill (I think I can, I think I can) yet until now it has had little effect. Yet in yesterday's Department of Energy supply report it showed US crude oil imports averaged nearly 8.8 million barrels per day last week which was down 24 thousand barrels per day from the previous week and over the last four weeks imports averaged 9.3 million barrels per day which is about 420 thousand barrels per day below the same four-week period last year. It might be because the OPEC cuts are showing up or it is also because with WTI and a glut of crude in this country, oil is going to other places like Europe where prices are more cartel friendly. Of Course what really gave futures a lift was the surprise draw in gasoline oil supply. Gas demand is back. Even as consumer confidence is at an all time low their gas demand is improving. Year over year demand growth is almost back to normal. Kind of a surprise but it could be a sign that the mood of the consumer is improving a bit. This fact and an improving technical set up on the petroleum charts, helped the complex rally. A rebounding stock-market also helped. The bulls have their best shot for a small sustainable run for a short while.
Speculators again are under attack. What is it with the Democrats and the Obama Administration and their continuing assault on free markets and recently particularly futures markets speculators. Why do they not get it? Futures speculators were not the reason we saw sky high energy prices or sky high agricultural prices earlier this year. The reason was in part because of the total breakdown of the US and global credit markets. We were told these guys were so brilliant? In fact if you want to blame anyone for the sky high agricultural and energy prices the government has more of the blame than any market speculator because ultimately, they were the ones that created the fundamentals that caused the credit crisis and the surge in commodity prices in the first place. The government created Fannie and Freddie - the great bank enablers - that allowed for bad mortgages to be written as the government - notably the democrats - was cheering them on. It was the Fed that made money cheaper than dirt and it's printing press that just kept churning out dollars that created the bad behavior. It was the government that used high pressure tactics on the banks to make loans to unsuitable borrowers. It was the people in government in positions of power that laughed all the way to the banking crisis as Fannie and Freddie and bank officials padded their campaign coffers. Now the reaction to all of this is to blame speculators for reacting to the greatest financial crisis since the Great Depression as opposed to thanking them for helping us avoid Great Depression 2.
Why blame the speculators? It is because they can't blame themselves. They blame speculators because at the end of the day they just do not understand what a speculators roll is in the freemarket marketplace or how they buffered this economy from an even greater meltdown than it is suffering. The commodity speculators have shouldered and carried a preponderance of risk for this battered economy. If they did not do it, the government and the taxpayer would have too. I don't remember energy funds and AG funds asking for a government bailout. So why, as the Financial Times points out, is Obama's chosen leader of the Commodity Futures Trading Commission vowing to crack down on the kind of speculation that many blamed for last year's sky-high oil prices and volatile swings across agricultural markets. Oh give me a break.
Sold April crude oil at apprx 4100 and on the verge of getting stopped out - stop 4360. If stopped, wait to sell again 4770 - stop 5100. Short term and swing traders call for short term buy points and to open your account.
Short March heating oil from apprx 14000 was bought back on the rollover at apprx 12377. Sold April heating oil at apprx 12342 - stop 13300.
We're short April RBOB from apprx 12700 - raise stop a bit to 13400. If the risk is too high take profits and look to sell a bit higher.
Sell April natural gas at 500 - stop 540.
