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Oil Market Takes Its Foot Off the Gas

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Friday, June 10: On a quiet news-cycle day, oil prices settled lower on Thursday for the first time this week, easing off of the proverbial gas pedal that pushed WTI over $50 the day before. After the front month WTI had risen three dollars this week, the market was probably due for a round of profit taking. The dollar also firmed a bit on Thursday, providing another reason for the bulls to break from their recent surge. The same fundamentals remain in play, however, with severe physical oil supply outages turning the global oil marketplace back into balance far quicker than expected. Read more

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Strong Day with the DOE

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Oil prices rose for the third straight day. This reaffirms a settle above $50, even with continued weakness in the dollar and a larger than expected crude oil stock draw in the weekly Department of Energy (DOE) inventory summary. After dipping below $49 last Friday, the front month WTI contract is up nearly three dollars this week, making new, 11-month highs in the process. The large DOE crude oil draw was certainly price supportive (though, that was somewhat offset by builds in the product categories). The continued noise, however, in addition to production issues in Nigeria are adding support to the flat price. Read more

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Breaking $50

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Front month WTI settled above $50 for the first time in nearly eleven months on Tuesday, spurred by continued weakness in the U.S. dollar and by the start of some technical short covering. Without any new news of late (supply outages appear to be the norm, and the Federal Reserve seems content to stay away from interest rate hikes), the oil market seems to be left to its own (de) vices, and the momentum now is certainly on the side of the bulls. Aside from last Friday’s minor dip, oil prices have been flat to up virtually every day for the last few weeks. Read more

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Just Another Manic Monday?

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Oil prices rallied on Monday, ex-RBOB, after Federal Reserve Chair Janet Yellen suggested that interest rate hikes were not forthcoming. This led to a minor sell-off in the dollar and an increase in equities and commodities. After settling lower at the end of last week, and “breaking” below $49 (a soft break), July WTI rebounded to close again with a $49-handle and again in the shadow of the psychological $50 barrier. While a single settle above that number would not necessarily signal another round of short covering and an ample move higher, a few days in a row might start that trend. Read more

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Breaking $50, 50/50 Either Way

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Oil prices ended a relatively quiet week on a soft note, settling lower after a surprisingly weak job report led a round of profit taking selling. Early Friday, the Government published its May employment data, released regularly on the first Friday of each calendar month. This month’s report showed a far smaller than expected build in new jobs, and also revised downward the March and April figures. The surprisingly weak report (in fact, it was the lowest number of new jobs added in five years) led to a strong round of selling, and the market never recovered from the weak start. Depending on your viewpoint, front month WTI is either primed to bust through $50 and move beyond, or has failed in its attempt to do so and should move lower soon. Read more

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Macro Oil News. Micro Movement.

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A day replete with macro-oil news ended with results similar to those of previous days this week (i.e. relatively unchanged at settle). OPEC held its 169th ordinary meeting on Thursday, and while the cartel made no official pronouncement on output changes, the comments afterward might be viewed as moderately bullish. Read more

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NO-PEC?

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Wednesday’s closing prices again belied some significant intra-day volatility, as rumors of a possible brokered OPEC deal lifted oil prices from early doldrums to near unchanged at settlement. The cartel meets today in Vienna, Austria amid current industry conditions that are favorable to producers as at any point in the past six months. While the industry generally believes OPEC will not formally announce any changes to current policy (as in, no production quotas), there were headlines yesterday that intimated said quotas might be discussed or implemented. Read more

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50 Still the Hill to Climb

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Oil prices settled relatively unchanged on the last day of the calendar month much like the previous few days. A late selling spree though could portent a weak start to the new month. Much like the streak in mid-May, in which the front month WTI contract settled with a $48-handle for a week in a row, we are now in a period where the WTI contract has settled at a $49-handle for the past four trading days. This stability is partly due to timing, with the current streak happening around the long U.S. holiday weekend with fewer participants and less natural volatility, but it also implies some confusion on future price direction. Read more

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A Midwest Shift in Gas that Could Tighten Southeast Supply

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The oil complex ended a relatively quiet week on a relatively quiet note, as front month prices for each of the major product categories settled near unchanged, and market participants took few risks ahead of the long holiday weekend. July WTI did manage to post a gain for the week, and even traded briefly above $50 at one point, but Friday’s activity was more about book squaring than price driving. Read more

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A Quick Peak at $50

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Thursday’s price action saw WTI trade over $50 for the first time since last October, though the early $50-plus trade was a mere tease to the weekend-ready bulls. Prices eased through the day, with finished products softer than oil, but the pullback was likely a result of book squaring and profit taking heading into the long weekend. Read more

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