Energy Overview — TotalView™ of the Energy Markets
Participants have apparently concluded that it is safe to begin acquiring length again. The logic seems to be the result of analysis that Chinese GDP growth of 8.9% in Q4 has left the export-driven, Sino-juggernaut untouched by Europe’s maladies. Additionally, this lower than expected result also indicates that Chinese monetary policy has been effective in keeping inflation in check…
Bearish inventory reports by both API and EIA had little effect on prices, allowing only a 100.88 low yesterday. Even as prices test the upper end of what has become a familiar range, it should be remembered that crude stocks now show a 1.5 MM bbl surplus to last year.… Read more
Bearish inventory reports by both API and EIA had little effect on prices, allowing only a 100.88 low yesterday. Even as prices test the upper end of what has become a familiar range, it should be remembered that crude stocks now show a 1.5 MM bbl surplus to last year.… Read more
Stock futures are marginally lower this morning. News that Germany’s economy contracted slightly in the fourth quarter is proving to be a reality check in the face of the New Year’s exuberance. Germany is dominating the news flow this morning. Chancellor Merkel is on the wire saying that Germany will seek help from the ECB to leverage the ESFS rescue facility.… Read more
Iran’s bellicose verbiage has succeeded in pushing up oil prices, without closing the Strait of Hormuz, or even firing a shot in anger. Also, the prospect of more monetary easing in China is fueling the idea that demand may be stoked in this export driven economy.… Read more
The equilibrium of the oil market will now balance on participants’ perception of Iranian intentions versus the coming European recession and its effect on aggregate demand. While the later is certainly going to have a deleterious effect on structural price construction, the former will temporarily trump all macroeconomic analysis, and is primarily the reason prices are holding over $100.… Read more
A strengthening dollar, at the euro’s expense, and a bearish EIA report gave caution to buyers who were mainly focused on Iran’s threats to close the Strait of Hormuz. While the threat of supply disruption remains extant, and should not be taken lightly, the pace of selling yesterday picked up as a late story crossed the tape that Iranian officialdom had responded positively to an entreaty from the West,
Iran dominated yesterday’s session yesterday with increasing bluster about closing the Strait of Hormuz, and warning the US not to send another aircraft carrier in the Persian Gulf. As we have been saying, we see little for them to gain by taking this all the way to a martial conflict with the US and its allies.… Read more
The market came very close yesterday to breaking above the recent high of 103.37, as hopeful economic data and concern about Iran’s intentions led shorts to prudently cover. Certainly understandable. Participants have seen this before and no one wants to get run over by a move propelled by emotion.… Read more
Crude oil moved to the highest levels in a week as an apparent assurance by Iran that a closure of the Strait of Hormuz was not imminent was offset by their test launch of a missile in the area. Participants clearly do not want to wager that an Iranian epiphany is underway.… Read more