Chinese Currency Devaluation Slams Stocks, Boosts Commodities
Energy Market Updates
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NYMEX, WTI Jump on Shale Slow Down & Inventory Concerns
The NYMEX shot up again today, after trending slightly downward the past several sessions. Last week saw Brent over $65/bbl and today WTI settled out +1.50 to 60.75, over the $60/bbl benchmark we've all been watching for.
RBOB Heats Up on EIA Inventory Shortfall
Today's EIA Inventory report for the week ending April 17th showed a build of 5.5mmb on Crude, but a drop of 2.1mmb on gasoline. Interestingly, even though analysts had projected a mere 2.6mmb build in Crude while the actuals were more than double that, Crude ticked upwards along side RBOB and ULSD initially before settling back down.
Commodity Slide Continues Into 2015
2015 is off to a wild start, with Crude dancing around and then dropping below $50/bbl. Wednesday (the 7th) Crude closed out at $48.65, yet another 5 year record. Gasoline and distillates have closed down every day this week, so it looks like the 2014 slide has no intention of stopping.
Stocks Rebound on Election, Energy Shares Continue to Falter on Cheap Crude
The Dow & Nasdaq were up in pre-market trading on news of a Republican sweep last night, and stocks are continuing to rebound this morning after Tuesdays drop off. The exception to this rule being energy shares, which are pulling the S&P down on the back of plummeting Crude prices.
The ADP report on October job creation came in at 230K, 10K above the projected number. Strong payroll numbers for October and September, continually falling initial jobless claims and a surprisingly good Q3 growth number (3.5%) are all good signs for the overall economy.
Election Day Free Fall for WTI, Stocks
Everything is dropping across the board today - WTI is maintaining itself under the $80 benchmark (currently -1.76 at 78.78/bbl), Gas and ULSD are both down over 5 this morning on the NYMEX and the Dow and Nasdaq are both following suit into the red.
So whats going on?
Goldman Sachs Cuts Price Forecast for Oil: Projects $75/bbl Benchmark
Goldman Sachs has revised its projected oil prices for 2015 to $75/bbl for WTI and $85/bbl for Brent Crude, in response to ramped up supplies and slow projected global economic growth.
Production from the US, Brazil, and the Gulf is projected to increase almost 1 million bpd, combined, and OPEC production is assumed to remain more or less stable - with gains in Iraqi production and drops in Libyan output essentially cancelling one another out.
Commodities, Stocks and Consumer Confidence Drop
Dollar Surges, Nymex and DOW plummet
The trend is definitely your friend! As bearish tones continue to make tsunami like waves throughout the market, commodities took a beating along with the entire equity complex today. The DOW fell a massive 3% on continued fears of a weaker than expected US economic picture. The dollar soared higher today against the foreign basket as the European Central Bank bought bonds in an attempt to ward of a debt crisis taking over the region. A weaker jobs outlook also played heavily into the mentality of traders today that had most running to book profits as quick a they could. As fears of the dreaded double dip recession continue to make their way to the front page, Markets across all lines have taken huge hits. I must say, from an end user perspective, this is OK. The major hurdle for the Country to leap over and to finally overcome the recession has been higher fuel prices. Without a less expensive way for Americans to go from place to place, ship goods, heat their homes, etc. etc. ,it is impossible to even think to believe we are in a better place. It all starts with lower fuel pricing. The key now is for these levels to maintain for a reasonable amount of time, if not fall further. Demand will be a central player in the equation "where do we go from here" . At the close, Crude fell $5.30 to $86.63, HEAT dropped .1250 to $2.8939 and RBOB lost a staggering .1941 to $2.7372. Expect to see a buy back on Friday with Monday's action setting the tone for the remainder of the summer.