Oil prices kept sliding this week on positive signs, despite a draw in US Crude supplies.
Tuesday dropped on news of Iraqis striking an export deal with the Kurds that will resume the flow of oil from Kirkuk that had essentially been stalled out previously. Brent responded to the news by almost completely reversing its 3% gain on Monday and settling down $2 to $70.54. WTI, which was up 4% on Monday also dropped a little over $2 to close out at $66.88.
Besdies the Iraqi deal, factors in play in the selloff were also that the CME Group raised initial margins on crude oil futures by almost 16% which probably spurred sell offs, and the dollar also hit a 4 year high, which continued to push commodities down across the board.
On the NYMEX Tuesday both products tanked, ULSD ended up at 2.1544 (-.0580) and gas closed at 1.8116 (-.0694).
EIA Inventories out Wednesday saw draws on Crude (-3.5MMbbls) with builds in distillates and gasoline. NYMEX still closed down, although far more moderately than Tuesday's drop off, with ULSD settling out at 2.1334 (-.0210) and Gas settling out at 1.807 (-.0046).
The Fed's "beige book" notes came out Wednesday as well and were generally positive on the economy as a whole and referenced the growth potential from lower energy prices, especially from consumer spending.
There is also some positivity in the shale situation, despite the falling prices from oversupply, analysts are still predicting a minimum increase in production for 2015 of 500,000bpd, in addition to production from new Gulf projects set to come online in the near future.
Today the trends continued, with Crude landing at 66.81 (-.57), ULSD settling out at 2.1177 (-.0159) and gas at 1.7948 (-0114), possibly on the belief that we're going to see a positive jobs report tommorow. Will be interesting to see how the market reacts to its release. (When was the last time anyone guessed the jobs report numbers correctly, anyway?)