Buoyed by momentum trading and by a larger-than-expected crude oil stock draw in the weekly Department of Energy (DOE) inventory summary, July WTI broke out of its recent range-bound activity to post another recent high and settle on the precipice of $50. The front month WTI contract has been in minor slumber mode of late, settling in a dollar range for the past week-and-a-half, though price risk has always seemed to be more to the upside than the downside. The break out of that range augers well for another bullish move, though there will certainly be some selling pressure at or near the $50 price level. Trading volume should be quite voluminous on Thursday, as the market will look to square books and perhaps move risk before the start of the long U.S. holiday weekend. Read more
Wednesday, May 25, 2016: The front month WTI contract continued its tour of the $48-handle on Tuesday, in the process recapturing the small losses from Monday, as the market now awaits today’s mid-morning Department of Energy (DOE) inventory report. Though the market is clearly in bull mode, with prices up across the board this calendar month, WTI has been unable to get to $50, instead settling around $48 for virtually every day in the last week or so. Instead, the finished product prices have led from the front and have far outpaced the gains in WTI this month (a boon for refiners). The oil production issues are ongoing, however, without clear plans to get them back online and thus the energy complex seems to have more room to move higher than to retrace Read more
July, the new front month WTI contract, behaved very much like how the old one, June (expired), as the market traded in a fairly narrow range for the day yesterday. Though oil prices are up about three dollars, cumulatively, in the last few weeks, there has been a lull in that advance as the front month WTI (and Brent) contracts are sitting just below $50. In fact, including Monday’s settlement, the front month WTI contract has settled with a $48-handle in six straight sessions.
The recent macro narratives remain in place, with the global supply / demand oil balance quickly turning course (declining domestic production, outages in Canada and West Africa), but looming interest rate increases and a stronger dollar are limiting what could be an all-out bullish advance. (click Title to read more) Read more
Markets seesawed on either side of unchanged for most of the day of Friday, as markets took a relative pause, following the week's upward move. June Heating Oil (HO) was the big mover of the week, finishing the period up slightly over 8.5 cents.
Last week, June WTI finished the week up around $1.50, but expired Friday, and now the more expensive July contract is prompt. The U.S. dollar, which had been volatile the previous week, also experienced a relative lull on Friday, as it spent most of the day, moving in a narrow range. Read more
Wednesday night into Thursday morning, markets were trending lower. Although the previous day's inventory report was bullish, selling occurred as market participants looked to take profits from the almost $6 increase in WTI since May 9th. Added to that was concern about the possibility of an interest rate hike occurring in June. This market sentiment was quickly seen in a rising dollar, which reached its highest level since March 29th. As a result of a stronger dollar, June WTI was down almost $1.50 and June RBOB was down more than 5 cents. (Click Title to Read More) Read more
Thursday, May 19, 2016 - Crude oil prices settled fractionally lower on Wednesday, fading late in the day after notes by the Federal Reserve indicated that the committee may look to raise interest rates this summer. The news prompted a strong rally in the dollar (higher interest rates make the dollar more attractive), which, as we have discussed, is price-negative for commodities.
Oil did receive early supply from a moderately bullish Department of Energy (DOE) inventory summary, which showed significant draws in both gasoline and distillate stocks. Still, the late interest rate speculation ended up carrying the day. WTI remains at six month highs and is up a few dollars so far this month. [Click Title to Read More] Read more
Tuesday’s market move followed through on the strength of the previous day as the energy complex was driven higher across the board. Yesterday, the front month WTI contact reached its highest level since November 4th of last year. While not able to break through, the price peaked right under $48, bringing the key $50 level closer. The month of May has seen the crude oil contract gain roughly $2 thus far, and interestingly also witnessed a sizeable upward move in the U.S. dollar, a relationship that typically is defined by its inverse correlation. Read more
A new week started with a fresh round of buying and June WTI pushed through recent resistance points to settle, again, at a six-month high. The front month WTI contract has posted weekly gains in six of the past seven weeks (up $1.55 last week), on the heels of noted global oil supply outages, diminished domestic oil supply production and relentless domestic gasoline demand. Monday's advance also came in concert with a published report by banking giant Goldman Sachs, a recent oil price bear, in which the bank opined that the supply / demand imbalance has quickly corrected itself (and, at the same time, upped its near-term price forecast) ... Read more
The energy complex ended the week on a quiet note, with each of the major product indices settling near unchanged on Friday. Those minor day changes, though, did not mask the overall bullish trend of the week. Like Thursday, when prices settled virtually unchanged from the day before, Friday’s settlement saw little changes from Thursday (WTI down a little, the finished products up a little). For the week, however, the market tenor led to some serious buying (short covering?) with crude oil supply disruptions now becoming commonplace and crude oil demand, at least in the U.S., creeping higher after the slumber of refinery maintenance season ... Read more
A trove of bullish data led the crude oil prices higher on Wednesday, in the process setting new highs for this calendar year and breaking the market out of its recent sideways funk. Aside from continuing global oil supply disruptions ... Read more