Two Bullish Reports
Heating-oil and gasoline futures rallied
Wednesday as traders at the New York Mercantile Exchange were optimistic about
two bullish inventory reports.
The first bit of good news came from the U.S.
Department of Energy (DOE). The data showed lower inventories in crude oil and
products, along with a drop in crude exports, which many traders interpreted as
a sign that output cuts made by the Organization of Petroleum Exporting
Countries are finally beginning to take hold. OPEC pledged to cut crude output
by 1.5 million barrels a day beginning at the beginning of this year..
The DOE data, which showed a crude draw of 2.5 million barrels a day (“draw”
is the use of oil products from inventories), were especially bullish
because it came on the heels of yesterday’s report released by the
American Petroleum Institute. Yesterday’s data put crude inventories up 2.517
million barrels in the week ended Feb. 22.
DOE data showed a 3 million barrel a day draw, which included a 2.7 million
barrel a day heating oil draw and a gasoline draw of 1.1 million barrels a day.
This compares with an API draw of 2.495 million barrels a day and a gasoline
draw of 2.103 million barrels a day.
The next important piece of news will be next week when OPEC’s Secretary
General and OPEC’s President will meet with the Russian government to discuss
Russian oil output in the second quarter of this year. Russia has said that it
was having difficulty cutting back its production, which could increase the oil
inventory.
The news did not push April crude oil
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21.79 before closing lower at 21.29, a loss of .12. April heating oil
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May corn futures rebounded on the Chicago Board of Trade after three consecutive
days of contract lows. May corn
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also had a nice rally today. May soybeans
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well above its R2 Pivot Point (444.33) at 447.500. May wheat
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continued its decline. This is the third down day for wheat, which closed at
279.500 down 1.00.
Precious metals were trading mixed at midday with
gold futures drifting lower as U.S. stock markets rebounded. Then as the markets
began to fall, gold found its footing and ended up losing 1.70 an ounce.
April gold
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Exchange closed at $296.50 a troy ounce; May silver
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off pretty positive and was trading in positive territory, then went lower. The
last move of the day put silver in the positive zone. May silver closed at
444.500 up .200. April copper traded to a positive close, trading at 71.600 up
1.100.