The Swiss Rock Stocks, NYMEX Goes Along for the Ride

Posted by Kelly Burke on Jan 15, 2015 3:41:54 PM

Man grasping his head looking at computer screens

 

So a quick rundown on what's been happening in the markets this week:

Inventories

The inventory report from the EIA for this past week pegged Crude up 5.4mmb, to its highest level for this time of year in over 80 years. 

Gasoline inventories were up 3.2mmb, staying in the higher levels of the 5 year average for this time of year, and distillates were up 2.9mmb but remain in the lower half of the 5 year average range.

Markets

The stock markets across the globe went crazy today after the Swiss pulled a surprise move and removed the cap on the swiss franc (the cap keeps the franc artificially low versus other currencies), sending the Euro markets into chaos.Back here at home, dissapointing financial sector numbers pulled stocks down as well. The S&P dragged down with energy players and Best Buys' 10.9%  tumble.

The markets closed down across the board in the US,for the fifth day in a row.

The NYMEX closed down in tandem. Weak global financial data, plus the disappointing domestic bank earnings reports pushed oil down right along with stocks on a renewed concern about global demand levels in the face of oversupply.

Yesterday gas closed up over 8 cents, but today's drop erased a little over 5 cents of the gain. ULSD closed down a little over 3 cents to settle out at 1.6233, more than erasing Wednesdays gain of .0222.

Crude closed out at 46.23 (-2.23) a drop of a little over 4%. 

 

Politics

Yet another Keystone Pipeline bill has gone through Congress, and early this week it passed the procedural hurdles required to get it onto the Senate floor. Debate is expected to continue through the week, with a potential vote on Friday. 

The court case in Nebraska disputing the route of the pipeline has been settled, in theory removing the last remaining obstacle to the project moving forward.

President Obama has vowed to veto the bill, and it doesnt appear at the moment that the legislature has the votes to overturn the veto, so we shall see what happens there. 

 

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Topics: Keystone XL, CRUDE, EIA Inventories

NYMEX Tanking Despite Inventory Draws

Posted by Kelly Burke on Nov 13, 2014 2:20:00 PM

Line charts depicting the stock market scattered on a table

 

The EIA inventory report for the week ending November 7 showed draws in Crude & Distillates, with a build in gasoline. Crude drew down 1.7MMb and distillates drew down 2.8MMb, while gas built 1.8MMb.

Watching the screen though, you wouldnt think we showed draws - ULSD and RBOB are both dropping like the proverbial stone - both products had intraday lows well over 6 cents, with gas dropping down 8 for a few. 

UPDATE - ULSD close 2.3621 (-.0848) and Gas -.1054) - Yikes!! January& February gasoline closed under $2 at 1.9827, and 1.9899, respectively

So whats going on? Why even with a draw down on products, and once again heightening tensions in Russia/Ukraine are commodities dropping?

The jobless number report was higher than anticipated by about 10,000, but the numbers are still are hanging near a 14 year low so that ought not be a huge factor in either commodity numbers, or the stock market. The stock market, by the way, is retreating a little from it's record highs and hanging flat on the back of falling energy shares once again, due to falling prices. 

We still are in the same situation with OPEC and American production being sky high, and global demand due to economic growth being anemic at best, so the dismal supply demand situation is still at play.

Going out on a limb I would credit the extra oomph of todays drop off to lots of news regarding Keystone - with a bill being pushed through to the Senate that will actually make it to the floor, things are being shaken up on the energy front. Word is, in an attempt to save the seat of Landreiu, from Louisianna, who faces a runoff election challenge next month, Senate leader Reid has agreed to allow the legislation to the floor. 

Although most talking heads seem to think Obama will veto - still, the implication is that the midterms probably will be forcing some of the top energy agenda items through, and thats good news  - unless of course you fixed high, in which case dropping energy prices might start hitting you in the wallet very soon. 

How low can we go?

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Topics: Keystone XL, RBOB tumbles, NYMEX, Crude draws, EIA Inventories

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