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Slew of New Data Viewed with Interest

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Daily Settlement Prices

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.

Yesterday’s bullish move was somewhat tempered by a slew of economic data, which pointed to a stronger economic forecast. April’s Housing Starts and the Consumer Price Index (CPI) were both up for the month. The April CPI far exceeded the past two months’ numbers and was the largest gain in several years. These would indicate an economy that is progressing and brings the interest rate increase discussion back to the forefront of the market. This was furthered by comments by the Dallas Fed President, in which he indicated that he would push for a rate increase within the year. All markets will continue to track the talk of rate increases.

Post-settle trading focused on the release of Tuesday’s late afternoon API data release. The stats showed a crude oil stock draw of 1.1 million barrels, which was not as much as a Reuters poll which predicted a draw of 2.8 million barrels. However, both gasoline and distillate stocks were shown to have drawn significantly more than expectations. For the most part, market activity may be muted this morning, as we await the mid-morning release of the Department of Energy’s numbers. As noted in previously, these two reports have varied the past several weeks, so numbers should be taken with a grain of salt.

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