Thursday Morning – Oil Inventories
Posted by zmann on December 28, 2006
I’m short on words today having lost the will to write…too many new toys to play with, too little real data out this week so far. Holiday trading is pretty useless anyway and I’m comfortably short at present.
Oil Inventories – Another Small Draw Expected ?! “Expectations” are for another ridiculously small draw in crude inventories despite the partial week shutdown of the Houston Ship Channel. Traders and analysts tried this last week and it didn’t support prices despite the huge withdrawal.
Natural Gas . Inventory report delayed until 10:30 est Friday due to the Christmas holiday. Gas got pummeled again yesterday fall $0.19 to $6.14 for the February contract which becomes the front month contract this morning. The $6 mark looks likely to fall this week as fresh weather reports continue to show mild(ish) temperatures in the northeast through at least January 10th. Gas is due a small rebound although what was support at $6.50 will likely be resistance as the next two withdrawals are likely to be disappointing from an historical perspective.
Analyst Watch: Third day in a row…nothing. Despite the fact that natural gas has fallen 30% since the beginning of December and the stocks are up. Is everyone that well hedged or do the analysts just believe that gas will rebound and there’s no need to worry?
Energy Stocks Tracking The Global Euphoria. Who cares if the price of what you sell keeps going down? Who cares if the cost of getting it out of the ground keeps going up? Stock prices are rising in a year end blowout and the energy sector will not be left behind. I’m not adding new puts until the new year as this light volume trading is all but meaningless and I’d like to see the sector take on some direction.