Oil prices were higher on Friday in what seems to have been a relatively quiet session dominated by short-covering. Today (Monday) is a bank holiday in the United Kingdom (UK) and many European traders were looking primarily to balance their books and reduce risks. This approach seems to have taken root in US trading, as well. For the week, as a whole, refined products prices had trouble moving higher in the face of heavy resistance overhead, and that inability pulled crude oil prices back down, after they had broken to the upside at the end of the previous week. The composite picture, as we start this week, is one of an oil complex that tried to break higher in the week ended August 21st, but ultimately could not – which we discovered last week - after crude oil prices hit $75.00 but could not hold that level against the reality of lower refined products prices. [More]

Since March, bulls have pointed at a stronger Dow Jones Industrial Average (DJIA) as a sign that the economy would improve, and they insisted that oil demand would improve along with it. Up until very recently, though, gains in demand have been extremely spotty, with a gain in gasoline demand almost certainly balanced by a decline in distillate demand or total products supplied. This changed with this weeks DOE report, which showed the four-week aggregate average of total products supplied down just 0.87%, or 169,000 bpd, which is remarkable, considering that they were down 1.258 million bpd and 6.44% just seven weeks ago, with the first report released in July. That is an extraordinary rebound for the whole, over this summer. That, of course, was the bullish news. [More]

Oil prices were chugging along, advancing on stronger consumer confidence and a rallying Dow Jones Industrial Average (DJIA) and other stock market measures. October crude oil prices printed what had been an elusive figure at $75.00/bbl, and everything looked bullish. Traders were talking about expectations for drawdowns in crude oil and gasoline inventories in the upcoming API and DOE reports and there was no warning that there was anything amiss on the bullish side of the ledger. [More]

It was a light volume trading day yesterday as traders and brokers scrambled to get the most out of the dying embers of summer. Labor Day is still a full two weeks away, but schools start next week, so families have a limited amount of time to enjoy everything that is summer. Some will still get a few last licks in next week, but this is effectively the last week of the season. As a result, it is a little on the quiet side. The oil complex was higher yesterday, but it lacked the upward thrust we saw last week. The DJIA closed lightly higher and gave oil some support, but it seemed that momentum was at work more than anything else, yesterday. Traders have been bullish about last week’s crude oil drawdown, and expectations suggest that we could see another draw in crude inventories in this week’s figures. [More]

The crack spread has fallen dramatically over the last two days as traders bought crude oil as an “asset, but left refined products alone. This highlights the difference between markets where supply and demand cannot be ignored and crude, which has risen completely on extraneous, non-oil factors, like equities and currencies. On Friday, equities gained almost 156 points in response to fresh data that suggests that housing may be clawing its way back. The National Association of Realtors reported a 7.2% increase in home resales in July, which was better than expectations, according to Dow Jones. [More]

Yesterday started as the perfect canvass upon which to paint a bearish result, but it ended quite differently. Early yesterday morning, the dollar was steady and traders were looking at a 4.3% decline in Chinese equities, which set the table for another disappointing day in international stock markets. With a DOE report scheduled for its normal Wednesday release, oil’s fundamental bears had every reason to be optimistic. What actually happened left them stunned and in disarray. From a diagnostic perspective, though, it leaves issues clearer. [More]

The inevitable sharp rally came yesterday, and we now have a number of questions facing us today. The first question is whether this week’s statistics will be bullish or bearish. More figures are likely to be bearish, but that brings us to our next and perhaps most pressing question; if the statistics are bearish, will the market react to them? And that depends, to a large extent, upon what we see from equities, which is our next pressing question. And after that, we have questions about the US dollar’s direction. [More]

Oil prices continued lower yesterday, in effect confirming the decline seen on Friday. Stock markets (equities) suffered another decline and, although the dollar dropped yesterday, it did not fall by enough to generate enough buying in oil to carry the day. With the Dow Jones Industrial Average (DJIA) down 186 points, the oil market would have needed a very steep decline in the US dollar to rally. As a result, crude oil prices fell to their lowest level since the end of July. Traders have been talking about oil market fundamentals, which is a welcome relief to those who feel that oil prices should reflect oil supply and demand rather than extraneous outside factors, like equities or currencies. [More]

A rally in the US dollar combined with bearish economic news and a selloff in equities to scare energy bulls out of their long positions. It was another of those “perfect storms,” or contract bridge games where the winning pair wins a number of hands, “no trump.” No doubt about it, the bears are holding the high cards in the non-trump suits. For too long, the bulls have been bidding with plentiful trump cards – always playing for the “dummy.” If someone is holding trump cards, he or she doesn’t need to understand oil fundamentals. [More]

Oil prices were mostly higher yesterday, although there were some minus signs on the screen for the first two contract months in gasoline futures. A weaker US dollar helped push quotes higher, but those gains were short-lived as traders hedged their bets after the latest retail sales report came out on the disappointing side. Dow Jones noted its market roundup that France and Germany reported similar second quarter growth rates of 0.3%. While that is hardly blistering growth, it is growth, and that means that the recession is officially over in the European Union’s twin engines of growth (at least on the continent). [More]