Alaron Energy Commodity Comment

CHICAGO - Mar 9/07 - SNS -- Following is the oil and ethnaol futures comment from Alaron Trading Corp.

Got gas? Send us your poor, tired, your lonely. But please, above all else, please send us your petrol! We could be setting up for kind of a gas squeeze if you please.

The oil market is having trouble finding its own identity in a world of refinery uncertainty. If refineries keep going off line for one reason or another, are we ever going to need all our supplies of crude? The 6250 mark seems to be insurmountable. Still supplies of oil now stand at 17.4 million barrels below one year ago levels and last year oil hit an all time high. So it should not be too long before oil takes out that troublesome area.

That does not help as the refiners are falling further and further behind. Gasoline supplies are already 3.9% below what they were a year ago and reformulated gas is running way behind. This week’s DOE reported that refinery runs fell to 85.85 compared to the five year average rate of 87.3%. Last year we started the summer driving season with a much tighter supply.

Europe was more than happy to bail us out. High US gas prices served as a beacon for all that European product to come to our shores. What that means is oil products are going to continue to stay tight. Supplies of gasoline is tighter in Europe and there is less incentive to bail the US out.

Bloomberg News says that the opportunity to ship gasoline from Northwest Europe to the U.S. East Coast may be less lucrative than a year ago. Gasoline sold on the wholesale market on the East Coast 15.3 cents higher than wholesale gasoline sold in Northwest Europe, including the cost of shipping, based on data compiled by Bloomberg. The margin was as high as 58.2 cents last April.

Don’t think Canada will be bailing us out either. Last week over 130 gasoline stations in Canada ran out of gas due to a refinery fire there as well.

If you are complaining about high gas prices at least your gas isn’t getting rationed. The world fourth largest producer of oil and OPEC’s second largest producer of oil and a country that holds 10% of the earths proven oil reserves can’t seem to import and refine enough gas so they have to ration it. A country that reportedly spent 4 billion dollars on gasoline in 10 months is rationing gasoline. So I am assuming that’s why Iran needs nuclear power so they can run the refineries if they ever build them that is.

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We're long April crude from apprx 5925 - stop 5940 - target 6700.

Buy April RBOB gas at 17600 - stop 17400.

Buy April heating oil at 17600 - stop 17400.

We're long April natural gas from apprx 720 - stop 701.

Phil Flynn

Alaron Research Team

800.935.6487

pflynn@alaron.com

www.alaron.com

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