Return to Blog

Morning Energy Blog – December 20, 2016

Equities and the Economy:

• U.S. equities little changed since last Tuesday.
• U.S. dollar remains at near a 14 year high.

Although U.S equities closed higher yesterday they’re very marginally below last Tuesday’s close which was when the data was known for the last Morning Energy Blog. Last Wednesday the Dow closed at 19,911 and yesterday the Dow closed at 19,883, up 40 points from Friday’s close. The S&P 500 and Nasdaq also up yesterday at 2,263 and 5,457 which is also lower than last Wednesday. That being said, considering new highs have consistently been hit this month some consolidation is not to be unexpected. Call it bivouacking. CNN’s Fear & Greed index is still at a lofty/overbought level so I’d be cautious about putting “new” money in the market here. That being said, it sure feels that the market wants to “print” 20,000 before the end of the year. This morning the Dow is up 88 points just 29 shy of that number.

Oil

• Oil prices just about same as a week ago around $53.

Last Wednesday WTI and Brent closed at $52.98 and Brent closed at $53.90. Yesterday WTI settled up 22¢ at $52.12 while Brent fell 29¢ to $54.92. The January WTI Nymex contract expires today so we may see some position squaring. This morning WTI is up 36¢. All pretty much chatter.

weather-12-20-2016
weather-bar-image-for-blog
Courtesy of MDA Information Systems LLC

Natural Gas

• Natural gas prices have fallen materially since last week.
• 6-15 day forecast very warm for eastern half of the country.

After hitting a two year high at $3.777 natural gas prices have reversed weighed down by a continually warming weather forecast falling nearly 45¢ in less than two weeks. Yesterday the January Nymex contract closed down 2.3¢ at $3.392 from Friday’s settle . This morning natty is getting knackered trading 13.9¢ lower. Take a look at the weather forecast. The jet stream is buckling creating a “ridge” over the eastern half of the country allowing warm Gulf air to penetrate into the far north. Very bearish, and a welcome reprieve from the very cold weather we just had. The forecast for Christmas day for Chicago and Cincinnati are for highs to be 14 and 13 degrees above normal.

Elsewhere

The future has arrived. Last week Amazon completed its first delivery by drone. It took just 13 minutes to make the delivery. That short trip could mark a major milestone for both the retailer and the transportation industry. The delivery was part of Amazon’s Prime Air service. A customer in the Cambridge area of England took possession of the company’s first unmanned delivery. The drone delivery service was announced last July and allows customers to choose from thousands of items. The drones are designed to deliver packages weighing up to 5 pounds in 30 minutes or less. The service is still in the early stage of the test phase with only two customers.

Disclaimer: Although the information contained herein is from sources believed to be reliable, TFS Energy Solutions, LLC and/or any of its members, affiliates, and subsidiaries (collectively “TFS”) makes no warranty or representation that such information is correct and is not responsible for errors, omissions or misstatements of any kind. All information is provided “AS IS” and on an “AS AVAILABLE” basis and TFS disclaims all express and implied warranties related to such information and does not guarantee the accuracy, timeliness, completeness, performance or fitness for a particular purpose of any of the information. The information contained herein, including any pricing, is for informational purposes only, can be changed at any time, should be independently evaluated, and is not a binding offer to provide electricity, natural gas and related services. The parties agree that TFS’s sole function with respect to any transaction is the introduction of the parties and that each party is responsible for evaluating the merits of the transaction and credit worthiness of the other. TFS assumes no responsibility for the performance of any transaction or the financial condition of any party. TFS accepts no liability for any direct, indirect or other consequential loss arising out of any use of the information contained herein or any inaccuracy, error or omission in any of its content. This document is the property of, and is proprietary to, TFS Energy Solutions, LLC and/or any of its members, affiliates, and subsidiaries (collectively “TFS”) and is identified as “Confidential.” Those parties to whom it is distributed shall exercise the same degree of custody and care afforded their own such information. TFS makes no claims concerning the validity of the information provided herein and will not be held liable for any use of this information. The information provided herein may be displayed and printed for your internal use only and may not reproduced, retransmitted, distributed, disseminated, sold, published, broadcast or circulated to anyone without the express written consent of TFS.