Some news on energy market around the incoming week analyzed by Pitguru Daniel Cronin. Just review and discuss to find out right plan for our investment!
The Energies Review
For the week of December 6th, 2010
The market got bad employment news last week with non-farm payrolls data. The national unemployment rate moved to 9.8% and supplies increased in Crude Oil and Cushing Oklahoma, yet the energy markets made new yearly highs as Crude blasted through the huge resistance of $88.50 to above $89. Very interesting what is happening in the back end of the curve as Cal 12 Cal 13 went out of control as spreads went higher and higher. This is almost reminiscent of 2007-2008 when spreads went bid for in the back of the curve as now Dec11/Dec12 gained +90 cents Friday to +97. Dec12/Dec13 gained almost +105 as this market rallied to +115. The backwardation has really started to kick in and if one can remember back to the 2008 year once these spreads did that $90 crude was easily obtained. However, past performance is not indicative of future results. No matter what’s going on fundamentally, I think this market will likely continue to move higher as it has passed resistance. Look for $90 to $92 this week in Crude.
Natural Gas had a great week rallying to $4.34 in the January contract on better than expected results from inventories and in my opinion, this market is probably headed higher. I believe Natural will break the resistance of $4.50 this week to confirm the upside move.
Energy Market Review This Week: Dec 6th, 2010
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