July Crude Oil prices traded higher throughout the US morning hours, helped by inventory readings that showed a larger than expected draw. Private data late Tuesday afternoon and further confirmation from this morning's EIA report confirmed a larger than expected draw in crude supplies last week. The EIA report showed crude stocks falling 6.267 million barrels last week. Factors behind the unexpectedly large draw came from a significant decline in import activity and an uptick in refinery capacity. The refinery operating rate was up 2% to 88.4%. The unexpected draw and weakness in the US dollar helped the crude oil market rally despite a sell off in equity markets and a batch of lackluster economic readings.
Natural gas: Shoulder Season is coming to an end but we will have a couple more large increases in gas in storage. After that look for a bullish trend. Keep an eye on the deficit to the 5-year average. If it increases to over 100 bcf the price of gas will drift higher. If a hurricane enters the central GOM the price of gas will jump higher.
Oil Price - June 5
Oil Price - June 5
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - June 5
Oil prices still firm
By Dominick Chirichella - Thu 06 Jun 2013 06:20:48 CT
Yesterday's surprisingly large draw in crude oil stocks was enough to keep a firm bid on WTI prices throughout the session. As I suggested yesterday's oil price activity was driven by the fundamentals but tempered by the sell-off in equities during the US trading session as the market was disappointed in the first shot over the bow regarding US employment data week.
The ADP private jobs survey came in below the market expectations which has raised a concern in the market that jobs gains are slowing and thus the economy is also slowing. Equities sold off pretty hard in the US and in Asia overnight. This morning the weekly initial jobless claims will be released followed by tomorrow's very important nonfarm payroll data.
On the other hand a faltering jobs market is bad news for the economy but possibly good news from the perspective that the US Fed is likely to continue with their massive QE program. Further supporting that thought was the Fed Beige Book release yesterday that seems to suggest that the Fed policy options are wide open going forward. Equities were hit with a strong round of selling along with the US dollar also being pushed lower on the view that continued QE and a very accommodative monetary policy will weaken the US dollar further. While equities were a negative for oil prices a weaker dollar is supportive for oil and most traditional commodity prices.
By Dominick Chirichella - Thu 06 Jun 2013 06:20:48 CT
Yesterday's surprisingly large draw in crude oil stocks was enough to keep a firm bid on WTI prices throughout the session. As I suggested yesterday's oil price activity was driven by the fundamentals but tempered by the sell-off in equities during the US trading session as the market was disappointed in the first shot over the bow regarding US employment data week.
The ADP private jobs survey came in below the market expectations which has raised a concern in the market that jobs gains are slowing and thus the economy is also slowing. Equities sold off pretty hard in the US and in Asia overnight. This morning the weekly initial jobless claims will be released followed by tomorrow's very important nonfarm payroll data.
On the other hand a faltering jobs market is bad news for the economy but possibly good news from the perspective that the US Fed is likely to continue with their massive QE program. Further supporting that thought was the Fed Beige Book release yesterday that seems to suggest that the Fed policy options are wide open going forward. Equities were hit with a strong round of selling along with the US dollar also being pushed lower on the view that continued QE and a very accommodative monetary policy will weaken the US dollar further. While equities were a negative for oil prices a weaker dollar is supportive for oil and most traditional commodity prices.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - June 5
Many things impact the price of crude oil. Gold and Crude Oil are the most heavily traded commodities in the world. They are both considered hedges against inflation and a weakening U.S. dollar. However, there is a big difference.
The value placed on gold is because it shines. If suddenly all the gold in the world disappeared we would survive. If suddenly all the crude oil disappeared, we are toast.
Crude oil is valuable because it is directly tied to our standard of living. By the end of this year, the world will be consuming 92 million bbls of refined petroleum products per day. Very little gold is consumed. Your spouse may misplace a piece of jewelry but that is about it.
The value placed on gold is because it shines. If suddenly all the gold in the world disappeared we would survive. If suddenly all the crude oil disappeared, we are toast.
Crude oil is valuable because it is directly tied to our standard of living. By the end of this year, the world will be consuming 92 million bbls of refined petroleum products per day. Very little gold is consumed. Your spouse may misplace a piece of jewelry but that is about it.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - June 5
Oil slumps after bearish OPEC report; API awaited
MARKETWATCH 1:07 AM ET 6/11/2013
NEW YORK (MarketWatch) -- Oil futures dropped sharply on Tuesday following a downbeat monthly forecast from the Organization of the Petroleum Exporting Countries.
Crude oil for July delivery fell $1.55, or 1.7%, to $94.22 a barrel on the New York Mercantile Exchange.
London-traded Brent July crude slumped $1.95, or 1.9%, to $102 a barrel on ICE Futures. The move added to Brent's 0.6% drop on Monday, as the North Sea's Buzzard oil field returned to full production.
The latest OPEC report predicted that global oil demand would increase by 900,000 barrels per day in 2013's second half. That's an improvement from an increase of 700,000 barrels per day in this year's first half.
"However, risks are skewed toward the downside," the report said. "In the OECD, this is due largely to the weak economic outlook for Europe, as well as to any possible setbacks in the U.S. economic recovery."
The report was "definitely a bit bearish," Tariq Zahir, managing member of Tyche Capital Advisors, told MarketWatch Tuesday. He also said in an email that one line in the report that stood out to him was risks being skewed to the downside.
The markets now await weekly U.S. supply data from the American Petroleum Institute, due out at 4:30 p.m. Eastern time. In addition, the U.S. Energy Information Administration is scheduled to release its weekly data on Wednesday at 10:30 a.m. Eastern.
Elsewhere in the energy complex, July gasoline dropped 5 cents to trade at $2.79 a gallon, while July heating oil slid 4 cents to $2.85 a gallon.
Natural gas for July delivery fell 4 cents to trade at $3.76 per million British thermal units.
MARKETWATCH 1:07 AM ET 6/11/2013
NEW YORK (MarketWatch) -- Oil futures dropped sharply on Tuesday following a downbeat monthly forecast from the Organization of the Petroleum Exporting Countries.
Crude oil for July delivery fell $1.55, or 1.7%, to $94.22 a barrel on the New York Mercantile Exchange.
London-traded Brent July crude slumped $1.95, or 1.9%, to $102 a barrel on ICE Futures. The move added to Brent's 0.6% drop on Monday, as the North Sea's Buzzard oil field returned to full production.
The latest OPEC report predicted that global oil demand would increase by 900,000 barrels per day in 2013's second half. That's an improvement from an increase of 700,000 barrels per day in this year's first half.
"However, risks are skewed toward the downside," the report said. "In the OECD, this is due largely to the weak economic outlook for Europe, as well as to any possible setbacks in the U.S. economic recovery."
The report was "definitely a bit bearish," Tariq Zahir, managing member of Tyche Capital Advisors, told MarketWatch Tuesday. He also said in an email that one line in the report that stood out to him was risks being skewed to the downside.
The markets now await weekly U.S. supply data from the American Petroleum Institute, due out at 4:30 p.m. Eastern time. In addition, the U.S. Energy Information Administration is scheduled to release its weekly data on Wednesday at 10:30 a.m. Eastern.
Elsewhere in the energy complex, July gasoline dropped 5 cents to trade at $2.79 a gallon, while July heating oil slid 4 cents to $2.85 a gallon.
Natural gas for July delivery fell 4 cents to trade at $3.76 per million British thermal units.