Commodities and Stocks See-Saw on Sanctions, EIA Numbers, Unemployment, and Tech Dissapointments

Posted by Kelly Burke on May 9, 2014 1:18:03 PM


Line charts depicting the stock market scattered on a table

Wednesday's EIA report showed that the API projected Crude drops come to fruition, falling 1.78 million barrels. As we all saw this pushed up Crude & ULSD prices on the day, with ULSD closing up .0398 to 2.9275, and Crude up to 100.81, once again hanging by the new (unfortunately) benchmark of $100 we've all been hoping to drop from for quite some time now. 

Brent ticked upwards this week as well on EU discussion of stricter sanctions on Russia. Putin had announced earlier this week that Russian troops had withdrawn from the border, but no such withdrawal happened according to everyone else in the area, so more sanctions are back on the table it appears. Economic sanctions on the world's second largest energy exporter are, unsurprisingly, not great for downward price pressure. 

In contrast to Crude - US Natural Gas inventory was up 94 bcf and prices dipped slightly. That sounds like good news after the supply crunch (not to mention spiking prices) of this past winter, and it is, but bear in mind prices are likely to remain relatively high for nat gas in the foreseeable future. Why? Because even with a build of 94 bcf, supplies are close to 45% lower than they were just a year ago today and the only demand control as supply limps back up is the price level, unfortunately. 

In the broader stock market, the S&P is poised for a weekly loss, largely due to drops in energy & utility shares. The DIJA dropped 4.1 percent in 5 days over tech stock dissapointments (ahem, Twitter & Groupon), and the Nasdaq dropped almost 2% as well. Last week stocks were up for the week minus a Friday drop off, which was a little unforseen because the weekly jobs report was strong (at least on the headline level).

April's Job numbers showed unemployment dropped to 6.3%, the lowest in 5 years. However, the margin of error for revision is pretty large on these reports of late, so there may be some hesitancy in the market until the "real" numbers materialize. Additionally, the work force participation rate dropped to 62.8%, tying the all time worst record from 1978 (also October and December of 2013).

There's been a lot of contradictory indicators as of late from different segments -  real estate, manufacturing, labor participation, and Jobless claim numbers, for example, that make it difficult to get a good overall picture of the economy. As they say, the truth likely lies somewhere in the middle, but who knows where that is.   

 

 

 

 

Read More

Topics: Brent Crude, Inventory report, Jobless numbers, Crude draws, russia, ukraine,

WTI Drops Big (Again) on Expected Builds

Posted by Kelly Burke on Apr 22, 2014 2:53:08 PM

Barrel of oil with a line chart aiming up

Last week as we discussed, the EIA reports for the prior week (ending April 11) saw inventory builds in US Crude supplies while gasoline inventories drew down. Crude Inventories actually hit their highest level since June 2013 and production hit its highest level since 1988. 

Platt's is estimating that this Wednesdays EIA report (on the week ending April 18th) will show inventory builds of  up to10 million gallons. As a result of the anticipated build, WTI has dropped more than we've seen in the previous 3 months. Brent Crude, the European benchmark, wasn't quite so lucky.

Compared to WTI's over 2% drop, Brent was down less than one percent on continued Ukrainian tensions (stop me if you've heard this one before...) and on the heels of Vice President Biden's speech this morning in Kiev, in which he expressed US support for Ukraine. The sentiment, though true, wasn't very helpful for the already fragile (read: falling apart) agreements with Russia to reduce friction in the area, especially coming one day after Secretary Kerry demanded that Russian Foreign Minister Lavrov control seperatist activity in Ukraine, with the Russians firing back that the US should intercede in to control "Ukrainian militia activity" in the region and today insisting that any agreements reached in Geneva "have nothing to do with us".  

The global headache that is Ukrainian/Russian/US relations at the moment would likely have resulted in a lot of market volatility and price spikes, but consistently increasing inventory levels have seemingly kept it at bay, particularly domestically. Hopefully that trend continues, and we start to see some progress towards resolution in Eastern Europe.

 

Read More

Topics: EIA, Brent Crude, Brent vs WTI, Inventory report, russia, ukraine,, WTI Crude

Weekly DOE Petroleum Snapshot

Posted by Mark Pszeniczny on Jul 18, 2012 2:35:00 PM

As always, the EIA site is an invaluable resource for snapshotting inventory, futures and spot pricing. I've highlighted some relevant snapshots below, but for more information you can also visit http://ir.eia.gov/ this will allow you to reference any of the weekly/daily inventory reports (weeklys are published every Wednesday)

Here are the majors:

Trade estimates 7 18 12DOE Change 7 18 12API Change 7 18 12 

 

The weekly inventory report on US and PADD1 Crude is:

Figure 1. Stocks of crude oil by PAD District, January 2011 to present

 

Heres a snapshot of spot pricing this week:

spot pricing DOE report

 

 

 

Read More

Topics: Inventory report, DOE

NYMEX puts on rally hats to end day positive

Posted by Mark Pszeniczny on May 10, 2011 5:04:00 PM

We truly have moved to a market that is tick to tick.  We all recall the days when a .01 move in the market called for a meeting.  Today, right out of the gate RBOB was up .08 while HEAT limped along slower than Shaq last night and was negative most of the morning.  Early in the session for about 20 minutes, both pits tumbled with HEAT negative almost 4 cents.  Gasoline futures are spiking on concerns of Midwest flooding preventing shipments moving from key areas.  But with overall gasoline demand slipping last week and demand destruction appears to be settling in as retail pump prices hover around the $4 mark, todays jump seems somewhat nonsensical.  Imagine the gray hairs the station owners and gasoline end users have sprouted the last few sessions, from falling 20 cents one day to being up over 25 cents in the last two days!  With Wednesday comes another round of inventory numbers that are expected to show Crude levels build by 1mbls and products to show slight increases.  On another note, one which might have tempered todays gains, the NYMEX raised margin requirements making it more expensive for people to purchase futures, ultimately will have minimal effect on the course of business.  At the close, Crude added $1.33 to $103.88, HEAT found strength towards the close and gained .0394 to $3.0012 and RBOB led the charge jumping .1013 to $3.3797.

heat chart

RBOB CLOSE
                 CLOSE       CHANGE 
  
JUN    33797       +.1013
JUL    32538       +.0894
AUG    31578        +.0776
SEP    30898       +.0662
OCT     29128       +.0610
NOV    28735      +.0605
HEAT CLOSE
          CLOSE    CHANGE
JUN    30012      +.0394
JUL    30145      +.0406
AUG    30280      +.0408
SEP     30437      +.0406
OCT    30590       +.0405
NOV   30746       +.0409
Read More

Topics: Inventory report, Midwest Flooding, Gasoline demand drop

Mixed Data has NYMEX end Mixed

Posted by Mark Pszeniczny on May 12, 2010 8:32:00 PM

With the weekly inventory report came a mixed bag and subsequently a mixed close. As shown below, the largest variance was seen in gasolines which was the only thing that kept the trade positive today. Crude suffered losses finishing down 72 cents to $75.65, while products closed higher. RBOB added .0152 to $2.2101 and HEAT gained .0190 to $2.1591, further widening refining cracks. As we speak, Crude has fallen another 30 cents in aftermarket trading. Many are looking at demand, which has seen gasoline demand rise 10% over the same period last year and distillates rise almost 8% month on month. This after the EIA cut their demand outlook! How much of this is due to a strengthening economy remains to be seen. My sense is that demand, like IQ, wasn’t starting from a very high place so any increase is huge. Long and short, it looks as though we will be range bound for several sessions as investors keep a hairy eyeball on Europe and the DOW to evaluate how the financial crisis reverberates through the continent.

Read More

Topics: gasoline demand rises, Inventory report, CRUDE falls, The Market, NYMEX

Recent Posts

Posts by Topic

see all