wmeubank@ocp.kcmo.com
IRA EPSTEIN & COMPANY
223 West Jackson, 7th Floor, Chicago, Illinois
(September 24, 1997) ENERGY COMPLEX: CRUDE OIL–HIGHLIGHTS OF THE ENERGY MARKETS–The energy markets are in transition, going from the summer vacation driving season to the winter heating season. There were news wire reports that Turkish troops with tanks have entered northern Iraq. Amoco's Texas City refinery is still shut down. It generally produces 220,000 barrels per day, another factor lending support to this market. Winter is on the horizon, which in my experience could add more bullish sentiment to this market, and technically the markets are at the lower end of their trading range. Maybe a the bargain price area. The API (American Petroleum Institute), yesterday, reported that U.S. crude oil stocks fell 3,407,000 barrels; U.S. gasoline stocks rose 5,533,000 barrels, U.S. distillates stocks rose 1,568,000 barrels and U.S. refinery operating capacity fell 0.8% to 97.8%.
TECHNICALS–Technically, support in November crude oil lies between 1910 to 1940, in December heating oil between 5320 to 5350 and in October unleaded gasoline between 5650 and 5720. The resistance lies between 1990 to 2020 in November crude oil; 5790 to 5840 in December heating oil; and 5950 to 6020 in October unleaded gasoline respectively.
TRADING IDEAS–I would suggest a long position either in December crude oil or December heating oil at its lower support price levels, as mentioned above, using tight stops. I would also recommend holding December heating oil 6000 or 6200 Calls that you may have bought two weeks ago, as mentioned in my news report, at 160 or 100 respectively. Please call me for more detailed entries in these markets.
Kanu Rana
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