Wild Week on Wall Street & The NYMEX; Everything Keeps on Tumbling!
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Oil prices kept sliding this week on positive signs, despite a draw in US Crude supplies.
The market is tanking across the board (and dragging the S&P with it) on the results of the OPEC meeting for November on Wednesday. The meeting officially cemented the long suspected decision by the cartel to keep oil production and output at current levels, despite the crashing prices and global glut of Crude oil.
Saudi Arabia determined production would remain at current levels - as the largest producer in the group, they essentially set the policy. Several smaller members reportedly wanted to curb supply to raise prices, largely because a huge part of their country's economy runs off of the money generated from oil sales.
Natural gas hit $5/mmBTU on the NYMEX for the first time in over 3 years last week, over concern about supply and a increase in demand due to to continuing frigid temperatures throughout the country. As of Jan 30, prices have backed off some but the underlying supply issues behind the spike may still play a relevant role in Nat Gas volatility going forward.
Once again the NYMEX started off the session well into positive territory with a strong Sunday night open. Much of the gains were attributed to Chinese data released Sunday that showed its Industrial Output rose year over year, signaling stronger demand. But as the day wore on, continued worries about Europe, as the Italian Prime Minister abruptly resigned, appeared to be entering into Traders minds. That fear turned inward as the real concern centers around US distillate demand. Its Common knowledge that inventory levels of distillates are on the very low end of the range, so in the minds of most, the lack of demand is overshadowing the lack of product. Others point that this is just the season to book some profits as traders square up the quarter. I'm pleasantly surprised that we have maintained HO below the $2.95 level, a clear level of support is difficult to define at this time. At the close, Crude fell .37 to $85.56, RBOB was up only 7 points to $2.5981 and HEAT led the charge lower falling .0191 to $2.8962.
Yet again the early morning fake out had most running to the racks early in the day. Overnight action had both products up over four cents with the ongoing Libyan...
Futures soared higher again today as all eyes continue to be focused on the Mid East and Northern African Nations and the wave of civil unrest that has gripped that region.