Natural gas futures added to Friday’s gains in active trading Monday on the New York Mercantile Exchange. Petroleum markets were not at a loss for market-moving developments, and gains were scored across the floor from crude oil to natural gas to petroleum products.
March natural gas futures rose 23.0 cents to $8.531, adding to Friday’s 19.9-cent gain, and March crude oil jumped $1.82 to $93.59. Heating oil and gasoline futures also advanced.
Bloomberg reported difficulties with Valero and Citgo refineries and Venezuelan leader Hugo Chavez threatened to cut off oil shipments to the U.S. in retaliation for Exxon Mobil Corp. taking action to freeze $12 billion of Venezuelan oil assets.
“Crude rallied, and we followed crude,” said John Irizarry of Eagle Trading. He added that he thought the market had more upside, for “it closed well. It may have a little more to go because of [short-term] weather. I think $8.74 is good resistance.”
Tom Saal with Commercial Brokerage in Miami, in his work with Market Profile, correctly forecast Monday’s market action. Using monthly data he identified February’s initial balance between $7.58 and $8.08. According to Market Profile methodology, after establishing an initial balance the market will typically break higher or lower, and Market Profile has precise targets for each direction. To the upside Saal identified 50%, 100% and 150% targets at $8.33, $8.58 and $8.83 respectively. He also identified an untested (lower) “value area” at $7.003 to $7.279 but conceded that “could take time to test.”
Weather bulls are taking delight in a new round of storms expected to pound northeastern energy markets. According to Accuweather.com, the cold presently gripping the East is expected to be followed by additional midweek storms. The forecaster said a new storm expected to move into the Northeast by midweek will “cause outbreaks of thunderstorms as well as winter weather.” It forecast that temperatures would remain well below normal before the arrival of the next system. “This will help to produce some snow, sleet and freezing rain even in the big cities of the Northeast,” said Accuweather.com’s Alan Reppert.
Although temperatures were forecast to drop sharply Tuesday, by Wednesday temperatures move above seasonal norms, according to the forecaster. New York City is expected to see a high of 30 on Tuesday, well below its seasonal norm of 40, but by Wednesday temperatures are forecast to rise to 44. In Philadelphia Tuesday’s high is expected to reach just 32, far below its average high of 41, but by Wednesday the high is expected to climb back to 44.
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