Just as the thought that Charlie Sheen can actually be rehabilitated, the idea that releasing barrels from the U.S. Strategic Petroleum Reserve (SPR) can alleviate the upsurge in oil prices is a nice thought, but it is a specious argument.
Over the two weeks ended last Tuesday the net length of Nymex natural gas futures held by money managers dropped by 16%, from a record 207,413 contracts to 174,921. At the same time spot gas futures rallied around 1.8%. However, since last Tuesday gas has rallied another 5.8%!
Last night (Thursday), the United Nations approved military action against Libya, including a no fly zone and air strikes against Libyan forces. WTI and Brent rallied sharply in the electronic markets in response, but our question is: what took so long?
While the FOMC endeavors to pay close attention to the evolution of inflation, yesterday the Bureau of Labor Statistics (BLS) reported a much larger than expected uptick in inflation at the wholesale level in February, particularly for food and energy goods.
As of a week ago yesterday, total net length held by all non-commercial interests trading Nymex WTI crude oil hit a record 275,582 contracts; a 92% (!) increase since the end of January. As discussed on Monday, that is enough oil to fill the Nymex storage hub 6× over.
First Greece, then Ireland, then Tunisia, then Egypt, then Libya, then Japan, and now… Bahrain? The island nation saw severe protests yesterday, which caused the price of WTI to rally in intra-day trading. But as with the other countries listed, how important is Bahrain?
According to Friday’s Commitment of Traders (CoT) report from the CFTC, speculators (managed money) owned a record 274,235 contracts of WTI crude oil on the Nymex. That is a 68% increase in three weeks. Total net length held by all non-commercial interests rose to a record 275,582 contracts; a 92% (!) increase since the end of January.
Natural gas prices were weak yesterday after reports of heavy production in the Gulf of Mexico Producing Region. Furthermore, the latest 6-10 day weather forecasts place temperatures in the Midwest and the East Coast much above normal, reducing the chances of another weather-related boost like the one seen in prices last week.
the EIA’s Short Term Energy Outlook (STEO) revised its average price for crude oil in 2011 from $91 to $105, but how reliable is this?
The Strategic Petroleum Reserve (SPR) was created during the Ford administration in response to the 1973-74 Arab oil embargo. Barrels started moving into the reserve in 1977 during the Carter administration, to which a total of 108 million barrels moved in by the time Carter left office in 1981...
Yesterday’s (Monday's) intra-day charts show a strong inverse relationship between USDEUR and Nymex WTI, as illustrated in today’s issue of The Schork Report. Yet traders may be hesitant to trade this correlation consistently due to its historical tendency to break down
Keeping in mind that markets abhor uncertainty, the most significant (and obvious) driver supporting oil prices today are the two big unknowns related to the Middle East; namely, duration and contagion.
Apparently Hugo Chavez thinks the U.S. is distorting the situation in Libya “… to justify an invasion.” As if the video being shown on CNN, BBC et al. has somehow been staged (perhaps on the old set from Capricorn One) by the U.S.