Friday May 20, 2016
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.
Markets began to shift around mid-morning, as the weaker price levels brought buyers back into the fold. The buying moved markets far off the lows of the day to finish closer to the prior day settle. While it is tough to attribute anything in particular to the intra-day rebound, markets are still focused on reduced production in both Canada and Nigeria (where a prominent oil terminal was closed due to violence), along with strong domestic demand for refined products.
The lone exception to the weaker market was the Natural Gas complex. The EIA weekly release showed a build of 73bcf, which was at the low end of expectations. However, despite the lower than expected build, inventories remain at elevated levels following the milder winter.
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.