ENERGY PRICES WERE MIXED ON MONDAY… crude oil futures in New York and London plunged, then surged and then plunged again as the market (present company included) traced into a vicious whipsaw. Meantime, Henry Hub gas futures in New York meandered to a small gain.
Same old story in the natural gas pit… commercial and industrial demand is limping along, space heating demand is winding down and it is too early for a/c load. As such, the NYMEX continues to grind lower.
It may be a new week on the NYMEX, but it was the same old nonsense. As we illustrate in today’s issue of The Schork Report, spot WTI opened the pit session at the offer on knock-on weakness related to Friday’s IEA report and plunged by nearly 6 percent inside the first 30 minutes of trading. Bearish momentum stalled around our 49.19 intra-day. Then, beginning right around lunchtime the bulls (for reasons only they can explain) came into the market and bid the market by more than 6 percent into the mid afternoon. Alas, they could not hold out, but their antics traced into a classic whipsaw.
ETF Weekly Outlook: In their long-term forecast, Exxon stated that in the year 2050, 80% of our world energy output will be supplied by oil, gas, and coal –numbers which are comparable to today’s ratios. XOM’s CEO Rex Tillerson said, "We don't oppose alternative energy sources and the development of those. But to hang the future of the country's energy on those alternatives alone belies reality of their size and scale." And XOM is not alone. In 2004, Shell spent $1.7 billion on alternative energy projects as compared to $87 billion on oil and gas projects during the same period. Why is it so hard for the US Government to work with these powerhouses who are fully capable of developing and implementing a 21st century energy policy? If Obama can open a dialogue with Iran and Cuba, why not Big Oil? Obama is playing chicken with explosive energy prices and from what we have seen in the President’s first 100 days, he is most likely going to lose the game.