Weekly Gas Glut

  • January 31, 2001
  • Marc Dupee

Unleaded gasoline is down sharply after weekly statistics from the American Petroleum
Institute and Energy Information Agency showed an inventory build-up eight to 10
times greater than expectations. March unleaded gasoline
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has been setting up to make a large move, a situation highlighted by its Multiple Days Low
Volatility
 reading, and is down 3.3%, or .0279 to .8190. HUH1 is holding at the Jan. 4
gap, which is acting as support. 

As pointed out in this morning’s
Pre-Opening Futures Outlook, energies might also be pressured by what
appears to be a slip of the tongue from the Managing Director of the National
Iranian Oil Co. The official apparently said that he sees a “glut” of
supply over the next two months! Iran is a member of OPEC. The weekly API and
EIA data were bullish for crude oil.

Of course, all eyes are on the Fed and their announcement
on how much they will cut rates. The announcement is scheduled for 2:15 p.m. ET.
The nearby Federal Fund futures
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chance of a 75-basis-point cut today. Longer-term debt futures have rallied in
reaction to perceptions that the Fed might get more aggressive than originally
thought in light of this week’s data that shows declining consumer confidence
and today, a GDP rate of 1.4%. T-bonds
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10-year notes
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Stock index futures are showing price persistency ahead of the Fed. S&P futures
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and

Dow futures
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and
New 10-Day Highs lists.
Nasdaq 100 futures
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formation. We could either see a relief rally with a 50-point cut or an even
bigger rally if the Fed takes the unprecedented move–at least for Greenspan
& Co.–of cutting by 3/4%.

A day late, March sugar
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rally, triggering a Turtle Soup Plus One buy setup which registered
yesterday.