The Chinese oil demand teaser.
One day China's oil demand is bad and the next, good. Welcome to another mystery from The Middle Kingdom. Yesterday oil prices were pressured on reports of bulging inventories in China and weak demand. Platts reported that Chinese oil demand in August slid 5.4% from July. Platts said that China's implied oil demand totaled 33.02 million metric tons in August versus 34.92 million metric tons in July. Oil refiners in China are reporting that demand is still weak. Reuter's news reported that Chinese oil company Sinopec had sales of refined oil products still lower than one year ago. Reuters says that despite a moderate inventory draw in August, China's diesel inventories had been building up faster than gasoline had in past months, reflecting the slower consumption for the main transportation fuel used by Chinese industry and trucks.

Of course that was yesterday. Today oil is getting a boost on a report that China oil imports are the second highest ever. Chinese oil imports increased by 8 percent to 17.92 million metric tons giving oil bulls hope that demand in China is not as bad as feared after yesterday.

The truth is that China's oil demand is largely dependent on the strength of the dollar. The weak dollar has encouraged China to import more oil than they need. At the same time, it has the added benefit to hedge China's massive bond and dollar holdings. If the dollar increases in global value, China will not need to purchase as much is the short run as supplies are plentiful. The bottom line is: it will not be China that drives the next move in oil, it will be the Fed.

Sell November crude at 7378 - stop 7500.
Sell November heating oil at 18800 - stop 18900.
Sell November RBOB 18500 - stop 18700.
Stopped on short November natural gas from apprx 477 at apprx 460!!! 

The Dan Flynn Corn & Ethanol Report
 
Tuesday September 22nd 2009
 
Good Morning !
 
Welcome to Autumn !
 
The rally in the U.S. Dollar was once again short lived. With the upcoming G-20 meeting in Pittsburg coupled with several different weather forecasts is not conducive to your average trend following trader. In last nights action the December Corn had a range of 320 1/4 to 315 1/4 and as I write the last is 319 1/2 which is up 3 1/2 cents. Harvesting and weather play a key role as well as he economic numbers.

Remember Capitalism is not perfect. Can you name another system than can give prosperity and
an even playing field to fight poverty ? If you can name one I'm all ears !

On the Energy Front we bounced of yesterdays big brak. I do continue expect a break further due to finds of Natural Gas and Crude. Keep in mind the current economic woes can't justify the premiums
with the current events of the times.
 
Have a Great Trading Day !