Which do you think will happen first? Will the Federal Reserve raise interest rates or willObama close Guantanamo Bay. Well some have time tables and some do not but on both counts the answer is that nobody knows.
Now the bond markets seemed to be disappointed that there was no clear exit strategy by Federal Reserve Chairman Ben Bernanke yet it seems the oil bulls were less than impressed. Despite the fact that he said rates will stay low for the foreseeable future his optimistic tone that Central bank actions have save the global economy from total disaster is not exactly the type of stimulating talk oil bulls want to hear. With mounting supplies of oil, these bulls want the fed to say theare going to print more and more money so oil can continue to rise despite ample supplies. Real oil bulls know deep down inside that the real reason that oil has rallied the last quarter is the fed feeding in this historic stimulus. Theoil rally had been a Ben Bernanke creation. Create some type of inflation to avoid the ugly alternative deflation. This is Ben's oil market and seeing that Ben gave us the rally, he can alsotake it away. And even if Ben stays the course on strategy the oil bulls may want more Ben stimulus to keep the drive alive. Oil will need more outside stimulus to rally and if they do not get it the focus might slip back to worrying about supply.
Do supplies really matter when it comes to price these days? Well despite the fact that sometimes it seems like the market cares more about the stock market and the fate of the dollar, the truth is that yes Virginia, supplies really domatter. In fact the supply side now comes into play as the American Petroleum Institute draws the focus of the market overnight. The API reported builds across the board leading with a larger than expected increase in crude supplies to the tune of 3.1 million barrels. What is even more bearish is that in the important delivery point for the NYMEX crude in Cushing, Oklahoma,supply surged by a whopping 1.7 million barrels
Andwhat is moreis that as we seecrudeglutting, we also see products rising. The API reported that gasoline supplies increased by 1.3 million barrels in what is supposed to be the zenith of the summer driving season and the supplies of distillates increased by 147,000 barrels.
As we have thisbountiful supply of well just about everything, it came as crude imports fell from the week before. The API reported that crude imports were off by 563,000 barrels falling to a level of 8.92 million barrels a day. Product imports on the other hand were up by 475,000 barrels a day. The report should weigh on the market especially because the stock market seems to be taking a breath.
We're shortSeptember crude fromapprx 6660 -stop 6760!
Sell September RBOB at 18000 - stop 18500.
Sell September heating oil at 17450 - stop 17650
Sell September natural gas at 390 -stop 430.
The Dan Flynn Corn & Ethanol Report
In last nights session the December Corn could onlymuster a 1/4 cent lower after yesterdays big break.
It settled at 321 3/4 with a range of 323 1/2 to 321. Technically traderswatch various analysiswhich shows
we have an oversold. With funds joining in on the selling bandwagon and current weather conditions and prospects of the crop yieldswe can look for lower prices.
Be wary of a technical bounce. Next we will be talking of harvest pressure.
On the Energy Front it seems a possible major top has been established.
With the current pattern the Corn and Energies are trading this compounds bearish sentiment to the Ethanol Market.
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