CNBC's Bertha Coombs discusses the day's activity in the commodities markets. Brent was up and WTI was down on the day, as headlines out of Libya spooked some traders.» Read More
The correlation between crude oil prices and the unemployment rate is slightly positive in the short term, and largely positive five or six quarters later, writes Stephen Schork.
The 2009 refill season is officially over, but the EIA is already warning that injections may continue into this month, writes Stephen Schork.
Gasoline demand is MIA. Per last week’s release from the Bureau of Economic Analysis, gasoline expenditures in the third quarter were less than commensurate with the increase in retail gasoline prices. Thus, here at The Schork Report, we maintain that the consumer’s appetite for gasoline is becoming increasingly elastic.
Margins are now moving in a positive direction for refiners. This could translate into greater demand for crude oil once refiners return from maintenance, writes Stephen Schork.
We are still waiting for that much talked about, yet to be seen, knock-on to production from the cut in rig counts. Precisely, the year-on-year deficit in gas rigs has been greater than 50% since May; yet onshore production is down only 0.5% through August, writes Stephen Schork.
The tenor of U.S. economic headlines in the month of October was generally bearish, i.e. non V-shaped esque. On the bright side, reports on Industrial Production, Leading Indicators, S&P/CaseShiller Home Price Index, Existing Home Sales and Durable Goods all moved higher, writes Stephen Schork.
What goes around comes around and the December crude contract came around in a big way yesterday, reversing Wednesday’s 1.6% drop with a $2.41 or 3.1% rise to close at 79.87, writes Stephen Schork.
Gasoline production is back… at least for one DOE report, writes Stephen Schork.
Since December, retail gasoline prices have jumped more than a dollar a gallon or 66%, while 4.1 million Americans have lost their jobs. Therefore, we have to ask, why was yesterday’s sharp drop in consumer confidence, purportedly “unexpected”?, writes Stephen Schork.
Yesterday analysts at The Schork Report examined the DOE’s confidence intervals for the crude contracts for 2010. We found the DOE’s predictions to be low given the market’s sudden bullish sentiment, as evidenced by prices on Friday being at their highest annual levels, writes Stephen Schork.
It has been less than three weeks since the DOE issued its Short Term Energy Outlook for October, but prices moved further in those three weeks than they have in the past three months. For instance, October was the first month in which the DOE released confidence intervals for the major commodity contracts, writes Stephen Schork.
The market on the NYMEX received last week’s drop in refinery activity as bullish. Thus, only through the prism of the up is down world of Wall Street groupthink do weak margins on refinery outputs translate into a rosy outlook for refinery inputs, writes Stephen Schork.
Energy prices were strong on Monday… spot crude oil in New York ticked ever so closer to $80, while oil in London took out last summer’s 77.71 high print. Meantime, natural gas futures in New York faded initial weakness, but then rallied hard. Thus, at this point there is no real point in stepping in front of the NYMEX/ICE freight train, writes Stephen Schork.
A headline from Platts summed up the NYMEX reaction beautifully…NYMEX crude jumps $2 on bullish EIA data. Refinery throughputs plummet on weak margins, seasonal maintenance. We love it. That one simple headline succinctly sums the NYMEX paradox. Let’s dissect the diagram of this sentence, shall we writes Stephen Schork.
In light of the recent mass of arctic air the enveloped key market areas in the Midwest and Northeast, it behooves us to take a brief look at history. In thirteen of the last nineteen heating seasons, the winter high in the NYMEX Henry Hub contract was posted on-or-before the winter solstice.
Saudi Arabia is trying to enlist other oil-producing countries to support a provocative idea: if wealthy countries reduce their oil consumption to combat global warming, they should pay compensation to oil producers.
Bearish momentum in the corn market brought on by this season’s bumper crop estimates is to a degree, now being offset by implied demand from the transport sector. In other words, ethanol distillers best get while the getting is good, writes Stephen Schork.
This heating season’s early start not withstanding, the market is not pricing in a premium on winter material, i.e. the market is not pricing in concern regarding the availability of supply for this winter,writes Stephen Schork.
In essence, gas is cannibalizing itself, yet the NYMEX rallied. We must respect this rally, even though we do not understand the whys and wherefores of its origin… especially because we don’t understand, writes Stephen Schork.
Demand for crude oil is not strong… because demand for the stuff Eagle Point et al. used to turn crude oil into, is still poor. Be that as it may, the NYMEX contango will encourage refiners to liquidate inventory, writes Stephen Schork.