CAMERON HANOVER

[DAILY  PETROSPECTIVE]      December  28,  2010    

 

Energy  Prices   Settlements                        

Heating  Oil Crude  Oil

Month High   Low Settle Change Volume Month High   Low Settle Change Volume
JAN 253.20 251.27 252.43 0.77 9910 FEB 91.67 90.75 91.49 0.49 88391
FEB 254.25 252.08 253.55 0.89 21922 MAR 92.39 91.55 92.23 0.49 26375
MAR 254.45 252.84 254.00 0.99 5193 APR 92.99 92.28 92.83 0.47 12699
APR 253.15 252.05 253.16 1.23 3313 MAY 93.43 92.74 93.27 0.45 8760
MAY 252.45 251.57 252.75 1.49 1564 JUN 93.71 93 93.57 0.44 12300
JUN 252.80 251.40 253.07 1.63 1962 JUL 93.9 93.4 93.78 0.43 4747
JUL 253.71 252.62 252.53 0.00 672 AUG 93.98 93.33 93.88 0.42 3063
AUG 255.00 254.06 253.66 0.00 605 SEP 94.03 93.58 93.94 0.42 3876
SEP 256.13 256.13 254.84 0.00 70 OCT 94.12 93.5 93.98 0.43 1700
OCT 257.76 257.45 256.12 0.00 511 NOV 93.92 93.92 94 0.43 892
NOV 259.28 259.00 257.59 0.00 33 DEC 94.17 93.47 94.01 0.41 10503
DEC 260.68 259.09 258.89 0.00 601 JAN 93.63 93.62 93.9 0.40 142

Unleaded  Gasoline Natural  Gas

Month High   Low Settle Change Volume Month High   Low Settle Change Volume
JAN 243.14 240.50 240.56 -­‐1.53 16203 JAN 4.266 4.070 4.216 0.104 10809
FEB 242.02 239.63 239.78 -­‐0.90 20277 FEB 4.321 4.112 4.288 0.133 70216
MAR 242.30 240.23 240.52 -­‐0.35 6786 MAR 4.319 4.122 4.287 0.120 16619
APR 251.48 249.78 250.19 -­‐0.08 2685 APR 4.306 4.132 4.271 0.103 13483
MAY 252.12 250.22 250.68 0.03 1941 MAY 4.332 4.175 4.303 0.098 4537
JUN 251.19 249.83 250.44 0.10 1143 JUN 4.375 4.223 4.348 0.095 2350
JUL 249.55 249.25 249.33 0.14 483 JUL 4.440 4.290 4.413 0.092 2616
AUG 248.00 247.25 247.76 0.12 479 AUG 4.483 4.335 4.454 0.091 1319
SEP 246.00 245.92 245.87 0.09 313 SEP 4.496 4.352 4.466 0.091 1081
OCT 235.25 235.00 235.07 0.08 148 OCT 4.568 4.420 4.535 0.088 5880
NOV 233.50 233.40 233.21 0.07 139 NOV 4.755 4.631 4.725 0.077 2408
DEC 232.80 232.45 232.46 0.13 358 DEC 5.009 4.871 4.980 0.072 1499
 

Early  Evening  Review  for  Tuesday  

         Oil   prices   came   in   higher   on   Tuesday,   largely   in   response   to   a  
weaker   US   dollar.     As   the   morning   wore   on,   the   euro   started   losing  
ground   against   the   greenback,   turning   into   negative   territory   just  
before   10   AM.     At   that   Consumer   Confidence   came   out   at   a  
disappointing   52.5,   down   from   the   previous   reading   of   54.3.    
Expectations  had  been  for  an  improvement  to  56,  so  the  figure  was  
not   helpful.     Consumers   are   clearly   still   anxious   about   the   future.    
At   this   time,   crude   oil   prices   came   near   unchanged,   just   holding   on  
in   positive   territory.     That   was   as   poor   as   it   got,   though.     Equities  
rallied  from  there  and  oil  switched  to  following  the  DJIA,  while  the  
 blog.timesunion.com  
dollar  followed  a  straight  line  higher  through  the  session.  
                                                                                                                                                                                                                                                                               Research:  203.801.0771  
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CAMERON HANOVER
[DAILY  PETROSPECTIVE]      December  28,  2010    
 

         The  US  dollar  was  under  selling  pressure  from  just  before  7  PM  Monday  night  until  just  before  7  AM  
Tuesday  morning.    At  almost  7  AM  exactly,  the  dollar  printed  its  low  for  the  day  against  the  euro,  and  
shortly   after   that,   the   greenback   bottomed   for   the   day   against   the   Japanese   yen.     It   strengthened  
steadily,  against  most  currencies,  throughout  
the   trading   session.     Oil   started   moving  
higher   earlier   in   the   morning   based   on   a  
weaker   dollar,   but   after   7AM,   and   after   that  
investors  moved  seamlessly  from  following  a  
weak   dollar   to   following   a   strengthening  
stock  market  in  pushing  quotes  higher.  
               The   oil   market’s   ability   to   make   that  
seamless  jump  from  one  ‘horse’  to  another  in  
the   middle   of   the   trading   day   illustrates   just  
how   robust   and   resilient   this   market   has  
become.     It   has   been   able   to   switch   horses   in  
the   middle   of   the   stream   repeatedly,  
choosing  whichever  one  is  making  the  bigger  strides  forward  –  higher.    This  is  an  additional  illustration  
that   oil   prices   want   to   advance.     The   fact   that   they   chose   this   approach   at   the   end   of   the   year,   when  
trading   is   thin   and   relatively   inactive,   more   or   less   tips   the   market’s   hand,   as   it   were.     Investors   are  
especially  keen  to  follow  whatever  factor  is  most  supportive  of  prices  moving  higher.  
             The   economic   data   out   today,   Consumer   Confidence   and   then   the   Case-­‐Shiller   home   price   index,  
which   declined   0.8%   in   November   from   October,   were   predominantly   negative.     Predictions   had   been  
for   a   decline   of   0.2%   in   home   prices   and   for   a   rise   in   consumer   confidence.     Investors   chose,   instead,   to  
focus   on   a   SpendingPulse   look   at   retail   sales   of   all   items   except   automobiles   over   the   period   from  
November   5th   through  
December   24th,   which  
DOE  Expectations  
jumped   5.5%,   “for   the   best  
Category   Dow  Jones   Bloomberg   Reuters  
performance   in   five   years,”  
Crude  Oil   dn  2.800   dn  3.000   dn  2.900  mln  bbls  
Bloomberg  wrote  today.  
Distillate   dn  0.600   dn  0.875   dn  0.500  
                 SpendingPulse   also  
Gasoline   up  1.200   up  1.830   up  1.500  
gave   its   gasoline   demand  
Utilization   dn  0.1%     unchanged   dn  0.2%  
figures   on   Tuesday  
 
afternoon,   and   the   latest  
week   showed   consumption  
up   4.6%   despite   the   fact   that   drivers   were   paying   the   most   they   had   for   the   year   at   the   pump.     Demand  
came   in   at   an   average   of   9.613   million   bpd,   which   is   a   very   strong   number   and   the   highest   since   the  
week  ended  July  2nd,  before  Independence  Day.    Demand  was  up  3.9%  from  2009,  which  was  the  largest  
year-­‐over-­‐year  gain  since  the  week  ended  July  23rd.    Four-­‐week  average  demand  was  down  0.4%  against  
the  similar  four-­‐week  period  in  2009.    Four-­‐week  average  demand  has  been  lower  than  a  year  ago  for  
the   last   14   straight   weeks.     Year-­‐to-­‐date,   gasoline   use   is   now   up   just   0.3%   against   2009.     That   figure   has  
been  falling  since  August,  when  it  was  0.9%  higher.    Despite  the  poor  comparison  with  year-­‐ago  levels,  
which   is   largely   a   factor   of   price,   this   was   a   supportive   demand   report,   when   comparing   it   to   recent  
weeks  and  to  numbers  seen  in  the  final  quarter  of  2010.  
 

We wish our readers a Healthy, Happy, Safe & Successful 2011!

                                                                                                                                                                                                                                                                               Research:  203.801.0771  
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CAMERON HANOVER
[DAILY  PETROSPECTIVE]      December  28,  2010    
 
rd
We  will  next  publish  on  Monday,  January  3 ,  2011.  
 
Technical  Views  

Crude oil prices were higher on Tuesday, but are into resistance according to the Bollinger Bands above (blue oscillator line shows
resistance). Despite this resistance, prices are trending higher and investors are willing to buy on ANY bullish news.

Gasoline prices were lower on Tuesday, which is somewhat surprising. Prices have resistance on the Bollinger Bands (at blue
oscillator line) but the trend is clearly pointed higher. We see higher prices ahead, with a probable high in mid-May in 2011.
                                                                                                                                                                                                                                                                               Research:  203.801.0771  
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CAMERON HANOVER
[DAILY  PETROSPECTIVE]      December  28,  2010    
 

Heating oil prices were slightly higher on Tuesday, and they have resistance at the blue oscillator line on the Bollinger Bands above
the market. Still, the trend is higher, and we expect to see prices strengthen in 2011 with a probable high in mid-October next year.

After weakening against the Japanese yen overnight, the US dollar posted a low around 9 AM on Tuesday morning and
strengthened through the day.

The DJIA was up 20.51 to 11,575.54 on Tuesday, posting its highest level – so far – for 2010.

                                                                                                                                                                                                                                                                               Research:  203.801.0771  
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