Heating Oil

U.S. Securities & Futures Corp.
100 Wall St. NY, NY 10005 Tel (800) 818-9588 © Peter FiotiSept., 96

SUPPLY

API estimates inventories 10 to 11 million barrels lower than last year. · Inventories have been depleted in all petroleum distillates causing unseasonable contention for available crude supplies.
Iraqi oil for food agreement hasn't helped offset current world crude shortage as expected due to an unforeseen delay.
OPEC members continue to exceed its agreed upon crude quotas increasing output. OPEC has no real plan to prevent members from continuing to do so.
Labor disputes in the north sea have delayed millions of barrels of crude from the market, extending inventory concerns.

DEMAND

Winter oil demand is predominantly dependent on weather. The north-east uses the lion's share of domestic supplies. With the exception of last season; the north east has enjoyed mild temperatures in recent winters.
Public outcry over oil and gas prices has prompted a federal investigation and, in turn, at least a public commitment by oil companies to rebuild inventories. If this commitment is honored this could place greater demand on available crude during its season of greatest demand.

Year	Season	Low	Season	High	Change	Value
82/83	.8625	-July	1.0420	-Oct.	.1795	$ 7,539
83/84	.7770	-June	1.0530	-Jan.	.2760	$ 11,592
84/85	.7185	-July	.8385	-Oct.	.1200	$ 5,040
85/86	.6685	-July	.9015	-Nov.	.2330	$ 9,786
86/87	.2995	-July	.5660	-Jan.	.2665	$ 11,193
88/88	.4820	-Aug.	.5870	-Oct.	.1050	$ 4,410
88/89	.3985	-July*	.5510	-Jan.	.1525	$ 6,405
89/90	.4440	-June	1.1000	-Dec.	.6560	$ 27,552
90/91	.4630	-June	1.0780	-Oct.	.6150	$ 25,830
91/92	.5250	-June	.7225	-Nov.	.1975	$ 8,295
92/93	.5725	-Aug.	.6075	-Nov.	.0350	$ 1,470
93/94	.4785	-July	.5450	-Jan.	.0665	$ 2,793
94/95	.4580	-June	.5190	-Nov.	.0610	$ 2,562
95/96	.4575	-July	.6300	-Jan.	.1725	$ 7,245

Average	.6743		.9699		.2957	$ 12,417
Year	Season	Low	Season	High	Change	Value
This table is provided for reference purposes only. Because different contract months trade for different prices and the values used are extremes it is likely to have been impossible to garner the entire move. This table also does not display draw-downs which an investor may not be capable of or elect to hold. * The low was .3700 in Oct. (Charts & Data from Omega Super Charts)

MARKET VIEW

Our research from a seasonal perspective in the small chart suggests the lows of a year tend to form between June and August; also a season peak occurs between October and January. The table shows the historical prices and the subsequent value of the move during our estimated seasonal time frame. We feel the current persistent inventory problems and recent instability in the Middle East are likely to lay the ground work for a potentially strong rally in the fall. The long awaited Iraqi stocks coming to market look to be a far cry from meeting current demand; however it may provide an excellent opportunity for an investor to position himself for a potential rally.

Baring good weather of course....

CONTRACT SPECIFICATIONS

Hours ET 9:50 - 3:10
Size 42,000 gal
Quoted ¢/gal.
Value 1¢/gal = $4.20
Daily Limit 4¢/gal
Months F,G,H,J,K,M,N,Q,U,X,Z
Initial Margin I $2025 M $1,500

*‡ NOTE THE This table is provided for reference purposes only. Because different contract months trade at different prices and market liquidity it not guaranteed it is likely to have been impossible to capture the entire move this chart outlines.

charts courtesy of Excel
Price information from Future Source and Knight Ridder & USDA
If you have any questions about futures trading, our firm, or this report please call
1 (800) 818-9588 ext. 220 or

mailto:wallst1@bestweb.net

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