The Energy Report for Friday, December 22, 2006

The Energy Report for Friday, December 22, 2006



T’was the last Energy Report before Christmas, when all thru the pits,

Traders in jackets are worried how volume has slipped.

The way things are going some may stay in their house

And instead of waving their arms they may trade with a mouse.

So the exchange then extended the pit hours with care,

In hopes that the volume soon would be here.

And Putin was nestled and snug in his bed,

While visions of energy domination danced in his head.

First in was YUKO’s, now Shell is his poor sap.

This Putin won’t stop till he controls the entire map.

When he cut supplies in the Ukraine,

there arose such a clatter,

It wasn’t about money but politics that mattered.

Gas supplies to Europe could disappear in a flash

And now he wants Georgia and Belarus to pony up more cash!

And in Colorado they have been pounded by snow,

Yet for the rest of the country the winter is slow.

The El Nino they say may slow demand;

And there are shortages of snowmen through parts of the land.

And then what to my wondering eyes should appear;

The OPEC cartel drowning in tears!

They saw oil prices falling so lively and quick,

They had to cut production to give prices a kick.

More rapid than eagles, cartel members they came

And Ali Naimi whistled and called them by name:

“Now Qatar, now Iran, now Venezuela and Nigeria!

On, Iraq, on Saudi Arabia, on Kuwait and Algeria!”

From the top of the cartel the production must fall!

Now cut away, cut away cut away all!

The only answer left is to reduce the supply

And it’s very important that all members comply.

So back to their countries the members all flew

And they swore to the cartel to their quotas they’d be true.

And then, in a twinkling, the crude supply went poof!

Yet despite what you might think, prices did not go through the roof.

They must have thought that supply would soon turn around

And when the fog lifts in Houston supplies will rebound.

You see down in the channel the fog is thicker than soot:

And the visibility so bad that you can't see your foot.

So when the fog lifts the supply we won’t lack:

And the weekly inventories soon will bounce back.

And Christmas in Nigeria is not very merry,

With violence increasing it's really quite scary.

The insurgents are fighting for more energy dough,

And they are continuing to threaten the country’s rich oil flow.

A disruption would be a kick in the teeth

And not what you want when you hang your holiday wreath.

Because demand is still strong in China and New Delhi,

As they are consuming the oil just like bowl full of jelly.

And in the US the demand is still strong

but with weak manufacturing we might wonder for how long.

The market got hit with a weak Philly Fed;

And a slowdown in demand might be something to dread.

Still, oil overnight bounced back with a jerk,

As traders decided to come back to earth.

They gave it a nod, and the futures then rose,

And if the oil breaks above 64 we'll stay on your toes!

The bull then will buy as quick as a whistle

And the oil will fly like the down of a thistle.

There are many that worry about terror attacks;

And the bears in the market will have covered their backs.

Our Soldiers are fighting in lands far away,

And we must remember to pray for them each passing day.

For freedom they are putting up an incredible fight,

So to all of them and all of you:

Merry Christmas and Good Night!



We're long February crude from apprx 6333 - leave stop 6100.



We're long February heating oil from apprx 17400 - leave stop at 17100.



We're long February RBOB from apprx 17071 - leave stop at 16800.



Buy February natural gas at 660 - stop 640.



Have a GREAT day and Happy Holidays to all!