Re-energized!
Energy futures ended the session sharply higher – led by Gasoline and Heating Oil – as traders reacted to yesterday’s EIA energy stocks report. Both Gasoline and Distillate stocks declined last week, contrary to expectations of storage builds in both categories. This set the stage for sharply higher prices for energy products, as U.S. inventories remain tight going into the winter. Energy traders are also watching the weather, as a large thunderstorm system moving towards the Bahamas has the potential to become a tropical storm by early next week, and some forecasters expect the system to eventually move into the U.S. Gulf Coast area. Today’s rally in Crude Oil kept prices above the 20-day moving average by the close, which may spark further momentum buying. Support for November Crude Oil is seen at $78.44, with resistance found at $82.02. Support for November Gasoline is seen at 1.9450, with resistance seen at $2.0837. Support for November Heating Oil is seen at $2.1452, with resistance seen at $2.2502. November Crude Oil closed at $81.50, up $1.56, November Gasoline closed at $2.0522, $0.0563, and November Heating Oil closed at $2.2313, up $0.0526.
Gold bulls started flexing their muscles this morning, as an attempt by bears to move the market below $730 was met by aggressive commodity fund buying. In addition, a weaker U.S. Dollar and a sharp recovery in the energy sector were deemed supportive to the Gold market. This morning’s weaker-than-expected U.S. factory orders report for August gave further credence to the belief that the Federal Reserve will lower interest rates once again before the end of the year. Support for December Gold is seen at $725.00, with resistance found at $747.10. December Gold closed at $743.80, up $8.10.
Mike Zarembski, Senior Commodity Analyst
