CNBC's Jackie DeAngelis discusses the day's activity in the commodities markets.» Read More
Yesterday (Wednesday), the DOE reported a 4.84 MMbbl build in crude oil inventories, blowing away analyst expectations of a 1.2 MMbbl build. The API had reported a (comparatively better) 2.12 MMbbl build on Tuesday night, and last year saw a 3.89 MMbbl draw for the same timestep, so surely the DOE’s number incited a sell-off, right?
The Senate Energy and Natural Resources Committee kicked off their first hearing of the new Congress with one of the most controversial topics in the energy sphere: the safety of deep water drilling.
Bearishly construed rhetoric out of the Saudis overshadowed a plunge in the greenback. Consequently, the energy liquids complex took a header to start the new trading week.
Last Friday marked the 31st day since the solstice. Historically, this is when we see the coldest temperatures of the season in the Northern Hemisphere. In this vein, Mother Nature is coming through for heating BTU bulls.
Nymex crude oil tanked yesterday, falling at one point by more than 4% off of Wednesday’s high print. Bears were apparently spooked by the latest inflation figures out of China which showed another strong rise on both the wholesale and retail side of the economy.
Well, we always expect a certain degree of variation when contracts approach expiration, and the Brent contract for February delivery did indeed go off the board on the 14th. However, this month’s fluctuation was especially sharp and, if rumors on the grapevine are true, due in part to a single trading firm.
Prognostications by Wall Street’s best-and-brightest [sic] aside, the IEA clearly does not think $95 oil, let alone $100 is fundamentally justified this year. We agree, but in fairness to our friends on the Street, the IEA appears to be talking out of both sides of its mouth.
Be that as it may, spot prices are entrenched well below the $5 mark. That is all you really need to know in regard to the pathetic state of this market.
An anecdote from the Fed's Beige Book dovetails with what we have been seeing in the LPG markets (especially propane and ethane) since October. Fractionation spreads or fracs (margin between LPGs and natural gas) have been trading at highs, ≈$10 per MMBtu for propane and ≈$4.5 per MMBtu for ethane, not seen since the 2008 bubble.
We just saw a massive draw in crude oil inventories last month in the U.S. and yet the market is now paying you to take even more barrels off of the spot market.
Crude oil supplies in PADD II Midwest (inclusive of the Nymex hub in Cushing, Okla.) have been trending higher over the last two months. At the NYMEX hub alone inventories have risen for eight straight weeks by a total of 5.7 MMbbls or 18%. Consequently, supplies here finished 2010 at the 7th highest recorded level, 37.5 MMbbls, since the DOE began disaggregating the data for Cushing in 2004.
By now, we know Friday’s jobs report from the Bureau of Labor Statistics (BLS) fell well short of market expectations.
Yesterday (Thursday), WTI prices fell 2.13% while the USD strengthened 1.13% against the Euro. On cue, analysts and talking heads began to raise the WTI/USD inverse correlation argument to explain the price movements. Not so fast.
Be that as it may, there is a large consensus that crude oil is headed to $100 this year. That translates into around $3.30 for the U.S. consumer at the pump…and that could translate into a headache for GM’s shareholders.
While the natural gas market consolidated yesterday after Monday’s moon-shot, crude oil bears assumed the spotlight on Tuesday. The spot market for February WTI dropped 4.6% (peak-to-trough) through the first two sessions of 2011. However, bearish momentum yesterday stalled just below the midpoint, 88.83, of a congestive range from the first half of December.
Counter to the historical tendency for Nymex natural gas values to peak in the fourth quarter, the spot market in New York kicked off the first quarter yesterday by surging 6½% to a new winter high, 4.689. This event was likely spurred by two factors.
Aside from Friday’s end-of-year surge, spot crude oil on the Nymex has gone nowhere since analysts at The Schork Report switched their daily trading bias into Neutral on December 07th.
With winter bearing down on key natural gas markets in the Midwest and East, the Nymex Henry Hub gas contract has never looked weaker. Yesterday the spot market for January delivery plunged by nearly 5% after the EIA reported a 164 Bcf drawdown in inventory last week. Mind you, there was nothing bullish about the report, i.e. a 164 Bcf draw is on the extreme of the seasonal norm.
According to the latest revelation from WikiLeaks, an official (name redacted) from Venezuela’s state-owned oil company, Petróleos de Venezuela (PdVSA), complained to visiting U.S. economic officers last February that China was profiting handsomely from a sweetheart deal between Caracas and Beijing.
Fourth-quarter crude oil supplies in the U.S are defined by two distinct phases.