Oil Prices

[dan_s]

May crude oil prices had a gap lower open Tuesday night and trended lower throughout Wednesday's session. The crude oil complex came under heavy selling pressure during the US morning hours, weighed down by a round of disappointing economic data and a lackluster EIA inventory report. This morning's US economic data on both the labor market and service sector came in a bit weaker than expected. May crude oil prices sold off to a new low for the session in the wake of this morning's EIA inventory report, which showed a slightly larger than expected increase in crude stocks. EIA crude stocks rose 2.707 million barrels and are 26.225 million barrels above year ago levels. Crude oil imports for the week stood at 7.931 million barrels per day compared to 8.158 million barrels the previous week. The refinery operating rate was up 0.6% to 86.3%. An afternoon wave of long liquidation selling took May crude oil prices down toward the $94.00 level.

IMO we were due for a pullback. This does not concern me unless the price of oil drifts lower on Thursday and Friday.

I am expecting a bullish natural gas storage report tomorrow that should push storage levels below the 5-year average. I now expect us to be 100 bcf below the 5-year average by mid-April, which would be very bullish for NG prices.