Floating Barrels, Sinking Sentiment

Once again we ended last week with a nice correction only to give it all back so far this week.  Again finding ourselves smack dab in the middle of the summer range.  Forward looking sentiment appears to have fully accepted we might be in for a bear run soon.  A start to an Israeli-Hamas peace deal looks to be on the horizon.  A mixed bag of Inventory data this week that is likely to be corrected due to the shutdown-Distillate demand strangely jumped almost 8% over last year.

The fire at the Chevron refinery was limited to a JET fuel production facility.  And continued unstable policy setting keeps toying with the market psyche (a proposed tariff on all imported commercial trucks to go into effect NOV1).  The most impactful metric that could weigh on futures pricing is that right now, there is roughly 1.2 billion barrels of crude at sea.  This excludes any in storage or in transit, meaning all the ships are out just looking for buyers.  Prompting many investment houses warning the “oil glut” could be real.   It is doubtful that we will see a sudden, drastic drop in pricing, as these can typically be longer term corrections.  Still, the market has its own mentality and may shun all the bearish signals.  Keep in contact with your Supplier as opportunities come and go quickly.