Morning Petrospective – July 21, 2011
il prices were higher in overnight trading Tuesday night into Wednesday morning. But they sold off after opening up for the normal trading session in New York. In early trading, through much of Wednesday morning, oil prices were lower while the euro was higher and equities were higher. It did not last, though, and by the end of the trading day, all three oil complex contracts were higher in accord with a higher euro and higher equities. The DJIA ended the day with minor losses, down 15.15 points to 12,571.91. It had been slightly higher when oil prices ended their open-outcry session.
The US dollar was under selling pressure for most of Wednesday. We had a couple of important rallies in the dollar, but it was basically moving lower over the course of the last 24 hours. The dollar finished near its lows for the day, and that helped oil prices to settle for the day much nearer the day’s highs.
Stock prices (equities) were higher at various points, but the DJIA was down 15.15 points to 12,571.91. But, It did act as a reason for prices to advance for a couple of hours in the middle of the day.
Traders were also reportedly buying on Wednesday in response to this week’s DOE report, which showed a larger-than-estimated drawdown in crude oil stocks. The draw was 3.727 million barrels. It took a while for it to influence traders, though. And, it is curious that they were not equally put off by the larger-than-expected build in distillate stocks, which were up 3.432 million barrels. Estimates had been for a crude draw of 1.2 to 1.5 million barrels. But distillate stocks had been expected to increase by 0.8 to 1.5 million barrels, so both missed by roughly the same amounts.
And refinery utilization, which typically drops after Independence Day, was higher this week, largely, it would seem, because of better margins than are normal at this time of year. Traders should have been dismayed by the increase in gasoline production of 344,000 bpd. Distillate output was up 85,000 bpd.
Demand also was poor. Four-week total demand was down 301,000 bpd, or 1.57%, from a year ago. Four-week gasoline demand is now down 2.17% and four-week distillate demand is down 2.53%. These have been worse, but they are still not exactly bullish.
In other news out on Wednesday, sales of previously owned US homes fell in June to a new seven-month low-point, falling 0.8% to 4.77 million units. These figures, released by the National Association of Realtors, were well below the average pace of 4.90 million units predicted by a Bloomberg survey.
FMX Newswire
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Bentek Energy
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Platts
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Bloomberg
- Exxon Mobil Seeks More Shale-Gas Acquisitions as Texas Wells Pump Profits.
- Oil Declines From Near Highest in Week on Chinese Manufacturing, Dollar.
- Solar Earnings Mirage Brings Muddy Waters Concerns to China’s Panel Makers.
- China Says Experimental Fast Nuclear Reactor Now Connected to Power Grid.
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