Good Morning!
The Saudi’s pulled back from an early meeting with non-OPEC countries (Russia), which raised eyebrows in which I believe is nothing more than a tactical move. Analyst also believe that the Saudi move was intended to put pressure on Iran to agree to a freeze. Both Iran and Iraq are seen as potential blockers of an output agreement. On Sunday, the Saudi energy minister, Khalid al-Falih, reportedly said the oil market will rebalance on its own and questioned whether the need of production cuts were warranted, Reuters reported. As I came in the office at 5 A.M. this morning the January crude was trading sharply lower. Something magical must have happened after all the weekend blather the market boomeranged right back to the direction headed early last week. In the overnight electronic session the January Crude Oil is currently trading at 4650 which is 44 points higher. The trading range has been 4674 to 4514.
On the corn and ethanol front the story Reuters reported earlier has the Environmental Protection Agency (EPA) setting a target for total renewable fuel use ay 19.28 billion gallons for 2017. That includes 15 billion gallons for conventional bio-fuel, which is mainly corn-based ethanol, and 4.28 million gallons for advanced bio-fuels mandate. According to the agency (EPA), this is a victory for the ethanol industry and big corn. I can’t seem to trust an appointed agency that has not fessed up to their dereliction and complete debacle of poisoning with toxic waste into the Animas River in Colorado. Some people do have memories. In the overnight electronic session the December ethanol is currently trading at 1.611 which is .005 of a cent higher. The trading range has been 1.611 to 1.606
On the natural gas front today is the last trading day for the December contract so rollover or liquidate the earlier the better. The market seems to be buying into a bull market with a long cold winter forecasted when it finally gets here. Retirement of coal and nukes not backing up natural gas supplies could resonate a enormous bull market. In the overnight electronic session the January contract is currently trading at 3.282 which is 8 cents higher. The trading range has been 3.350 to 3.251.
Have a Great Trading Day!