The oil market ended a bullish week on an up note, with the front month WTI contract posting a dollar gain (and three dollars for the week). Friday, however, did not produced any oil-newsworthy notes. Part of the week’s price gain was in the shift in contracts from May to June (and the dollar-plus contango), but upward momentum is clearly on the side of oil (as well as equities for that matter).
As domestic crude oil inventories continue to post new, record all-time highs, the market should soon see draws in crude oil stocks as peak refinery maintenance season is ending and the strong appetite for refining crude will return (thus eating into the stock surplus). Though the dollar has also been stagnant-to-weak, we need to pay attention to its relative worth, as well. Often times the greenback’s value plays a bigger role in commodity price changes than market fundamentals do.
June WTI traded in the black virtually all day on Friday, even without any substantial news to push it higher. The market did dip on Thursday, on some relative strength in the dollar (and, perhaps, some light profit taking), but on Friday those gains were largely erased early in the day.
Trading volume was light, almost giving the appearance of a summer Friday, and the prompt WTI contract stayed in the range of $43 – $44 throughout the day. At the settle, a busy week ended quietly, with June WTI closing at $43.73 (up 55-cents).
RBOB and Heating Oil each posted a penny gain on Friday, in the process setting new 2016 highs for both products. Each of the May contracts were up seven cents for the week (and both expire this Friday).
Published by PAPCO, Inc. (PAPCO)
PAPCO Newsletter Disclaimer. The information that is published in this newsletter, including the market reports, is derived from trade, statistical, and other sources that we believe are reliable and accurate. However, PAPCO does not guarantee the completeness, accuracy, or reliability of such information, and information should not be relied upon as such. Additionally, PAPCO assumes no responsibility for the material contained in the newsletter and the views expressed therein. Further, PAPCO expressly disclaims any express or implied warranties or guarantees with regard to such information. The information contained in this newsletter and any views expressed herein are provided for your informational purposes only and should not be interpreted in any way as an offer, invitation to make an offer, inducement, or recommendation to buy or sell options contracts, commodity futures, products, or any other type of security.