Inventories and Saudi Market Moves Continue to Push Oil Prices Down

Posted by Kelly Burke on Jan 28, 2015 3:13:24 PM

Line charts depicting the stock market scattered on a table

Oil continued downward today on the back of the EIA inventory report for last week that indicated Crude stockpiles were up 9mmbl to a record high of about 407mmbbls. At the close, Crude dropped below $45/bbl, -1.78 to 44.45. ULSD and RBOB closed lower as well, ULSD settling down .0310 to 1.6318, and RBOB settled down .0051 to 1.345.

In addition to the inventory report, as we mentioned, the new Saudi leader has indicated the largest OPEC producer will continue on its track to hit production goals set. Both of these factors mean traders are still concerned with longterm over supply, which is continuing to drive down prices.

The Saudi stock market shot up today as well on rumors of relaxing restrictions on foreigners trading that market. This ties back to the oil oversupply, in that most are crediting the Saudi's potential move of opening the market up as a way to raise revenue and stimulate the economy in the non-energy sectors, which indicates further that the current oversupply will be a long term situation.

In other news, the House today passed a bill to expedite the process for permitting LNG exports. With the increase in US Nat Gas production (the US is currently the worlds top producer), the thought is exporting would not only be economically beneficial for the US but exporting to Europe could reduce the essential monopoly Russia has on natural gas supply in those nations. 

At the same time that passed the House, a Keystone bill continued to languish in the Senate when the attempt to pass a procedural motion to push the vote failed Monday. One of the ammendments to the current bill is a proposal to eliminate the ethanol mandate portion of the RFS - this will be an important one to watch, certainly.

Stay tuned!

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Topics: natural gas, CRUDE, Saudi Oil Minister, EIA Inventories

Saudi's to Stay the Course Despite New Leadership

Posted by Kelly Burke on Jan 23, 2015 3:20:30 PM

Line charts depicting the stock market scattered on a table

Quick note on the news this week - King Abdullah of Saudi Arabia died yesterday, temporarily rattling the markets. 

We discussed before that the Saudi stance on keeping OPEC hitting its production targets was a major factor in the continuing downward trends in the markets. Brent Crude shot up temporarily on the news - up about 2%,  but came off highs as the day progressed. 

The new ruler, King Saldman stated there would be no change to what he called the "correct policies" on oil the country has stood by even in the face of the 60% drop in prices. Additionally, the oil minister under Abdullah will keep his position in the new regime, which further implies that Saudi Arabia will stay the current course, and served to calm traders back down as the trading day wore on. 

On this side of the pond, today we saw ULSD close out +.0088 to 1.6467, and RBOB closed up .0053 to 1.3479. 

 

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Topics: OPEC, Saudi Oil Minister

Futures Move Higher as Stimulus Plan Takes Shape

Posted by Mark Pszeniczny on Sep 10, 2012 3:52:00 PM

While much of todays chatter centered around the wild cash blowout of gasoline on Friday, up some .24 in NY harbor, markets found a way to turn positive ahead of the close. Many are betting that a new round of Quantitative Easing, also known as QE3, will be announced after this weeks FED meeting. This bet was doubled down after Fridays disappointing payroll figures.While the stimulus plans are designed to boost economic activity, Commodity prices are often collateral damage and many agree that we might see higher prices with this round. Keeping the pits in check are the fundamentals which, even besides this weekends short term blowout, the nation is well supplied. Additionally there was a memo sent by the Saudi Oil Minister confirming the oversupply of product as well as the unsubstantiated value of the current marketplace. Look for the remainder of the week to be a wild one. At the Close, Crude finished up .12 to $96.54, HEAT gained .0179 to $3.1668 and RBOB .0044 to $3.0240

 

Daily Heating Oil Chart

Heat map

RBOB CLOSE
CLOSE CHANGE
 
OCT 30240 +.0044
NOV 29051 +.0059
DEC 28304 +.0059
JAN 28013 +.0054
FEB 27965 +.0058
MAR 28059 +.0059
HEAT CLOSE
CLOSE CHANGE
OCT 31668 +.0179
NOV 31674 +.0167
DEC 31666 +.0167
JAN 31639 +.0173
FEB 31524 +.0186
MAR 31322 +.0192
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Topics: CRUDE, RBOB, QE3, Basis Blowout, Saudi Oil Minister

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