Just as it looked like everything was on its way t o lower levels, the stock market advanced nearly 200 points and the dollar took a roundhouse to its jaw. The oil complex saw its prices shoot higher as a result of the big moves seen in its alter ego markets, with the third quarter increase in GDP being the primary motive behind higher quotes in the DJIA and lower quotes in the US dollar. GDP rose by 3.5%, above estimates for growth of 3.2%, and that brought the bulls out of hiding and back to the table for another heaping helping of risk, with all the fixings. And, after their recent regurgitation, there was plenty of room to gobble up everything laid out on the tablecloth. This rush back to the buffet left everyone paying in dollars, and the dollar index dropped from 76.228 late on Wednesday to 75.993 yesterday. [More]

This weeks DOE report had some surprisingly bearish numbers in it, with crude oil and gasoline inventories both increasing. Distillate stocks dropped, but there was still little sign of any weather-related increase in demand, which was up just 15,000 bpd against last week’s figure. Refinery utilization followed the pattern established over seven of the last eight years for this week, and was up 0.7%. Total products demand was down against last week’s figure and lost ground rather heavily against a year ago. It was a bearish DOE report. [More]

Yesterday's trading was thoroughly inconclusive, with oil prices slightly higher on the day. We had the peculiar situation of having oil prices, the DJIA and the US dollar all higher, although the dollar seems to have had the most important day on the charts. The DJIA was up 14 points in the narrowest range seen in months, and that seems to suggest that the buying was not all that strong, after several wide-ranged days in which buying and selling seemingly alternated in waves that pushed quotes up and down liberally. Yesterday’s activity had either rock-solid selling at its highs or just a lack of buying underneath, which is what we think. Oil prices were slightly higher ahead of the week’s reports. [More]

Oil prices were lower yesterday, making it three days lower running now. Crude oil prices took back all of last week’s accumulated gains – and then some – yesterday, while heating oil prices negated nearly 92% of last week’s gains of 4.59 cents a gallon. Gasoline was the laggard, taking back just a penny of last week’s gains of six and a half cents a gallon. And, it was once again a combination of the dollar and equities moving contrary to oil gains and letting oil fundamentals shine through. In any event, the index funds and ETF’s were kicking out longs and the trade was selling. Dow Jones wrote that investors were streaming out of equities and commodities and were getting back into the US dollar in a massive regurgitation of risk. At the center of yesterday’s maelstrom was a Wall Street Journal report that Bank of America could find it difficult to repay the money lent to it by the government. This led to a general retrenchment from banking equities as investors reminded themselves of the large volume of bad debts certainly still on the books across the banking sector. [More]

There are always (at least) two ways of looking at things, and Friday’s decline in oil prices gives us a chance to start at the same and end at the same place, but to take two different ways of covering the distance between them. Either way, our stories start with weaker equities and a stronger dollar, two unrelated instruments that have had a strong inverse relationship recently. And, we end with weaker oil prices on Friday. One camp would tell us that it is simply a matter of watching the two markets and then seeing whether they have given oil prices a push or a pull. [More]

Oil prices were lower yesterday as a steady dollar through most of yesterday’s session allowed the fundamentals in the oil complex to shine through – briefly. Equities advanced steadily yesterday, ending the day with gains of almost 132 points in the DJIA, although the advance was slow. The dollar weakened at the end of the trading day, eventually bringing the shutters down on the fundamentals. [More]

Equities prices were higher for most of yesterday’s session, but had a late sneak attack by sellers, leaving a kind of reversal day on the charts. Oil prices settled before the selloff in the stock market, represented by a Dow Jones Industrial Average (DJIA) that coughed up more than 92 points by the final bell. This week’s DOE report was ostensibly as advertised; crude oil stocks grew, refinery utilization rebounded slightly, and refined products stocks dropped. So, the supply side did what it was expected to do. On top of that, all three major stock categories (crude, distillate, gasoline) had reductions in their year-on-year surpluses. [More]

Oil prices went through much of the same pattern that had been seen the previous day in overnight trading, with buying followed by selling, and then followed by buying again before the opening of the open outcry session. It did not last, though, and selling was the dominant feature throughout yesterday’s normal trading session. It was always going to be a day likely to see a correction, anyway. After eight consecutive advances in crude oil and heating oil, with six days higher in gasoline, the probability was that there would be profit-taking on long positions ahead of the November crude oil contract expiration and ahead of last night’s API report and this morning’s DOE report. [More]

Oil prices were higher in early trading on Sunday night, sold off, but then rallied into yesterday’s close to finish at their highest levels in more than a year. Crude oil prices came within a whisker of $80.00, which is a price level not seen in a dozen months. Once again, it was the combination of a weak dollar and strong equities that powered oil prices higher. Some observers feel that it was only a lack of stronger demand in oil that prevented prices from reaching $80.00 yesterday. Oil traders have had a difficult time adjusting to the unexpected improvement in the supply-demand balance, because most had expected that it would be an increase in demand, rather than a sharp decline in supply, that would lead to improvement in the balance. [More]

The dollar was steady to firmer and the DJIA sold off 67 points as traders took profits ion both markets on Friday. They did not pursue that in oil trading, though, and prices continued higher. Dow Jones wrote about “economic optimism” in its Friday market roundup, but we tend to feel that trend dynamics were working with the big cuts in output to bring in fundamental short-covering. Fundamental traders have been focused on high inventory levels and poor demand, and last week’s DOE report altered the supply part of the supply-demand equation. Bitterly cold temperatures (near freezing) in southern New England and in the New York metropolitan area also brought in what we believe was short-covering ahead of the weekend. [More]