Category: The Energy OverView

Fundamental calculus as opposed to monetary policy remained the focus as the week waned. After a dramatic break on Monday, prices seemed to regain footing by Wednesday, but overnight price action today, so far, has brought renewed selling pressure. The market has largely digested the implications of the new stimulus programs, and continuing weak macroeconomic data suggest

October expiration yesterday produced a rather lackluster session of retracement on the heels of the dramatic fall, earlier in the week. Head-scratching continues over Monday’s abrupt price break. A rally based on an expectation that stimulative monetary policy was going to promote aggregate demand growth and employment, where it previously has not, was doomed from the outset.… Read more

The recent sentiment shift sharpened its lower focus yesterday with the weekly inventory reports which were interpreted as particularly bearish due to the large build in crude oil inventories and the steep decline in distillate demand that EIA reported. There has been no shortage of talk in recent days attempting to parse this abrupt shift in sentiment.… Read more

Investor focus on the likely economic benefit of additional stimulus was further discredited early in the European session as crude oil prices quickly retreated from the day’s high, reached after the Bank of Japan announced that it would expand its asset purchase program by 10 trillion yen in an effort to stimulate its economy as global demand slows.… Read more

It wasn’t a fat-fingered flash-crash. It wasn’t an SPR release. CFTC can stop their investigation. It was long liquidation; pure and simple. Why? Nothing more than an overbought market breaching an important psychological level which failed to produce follow-on momentum. The folly of the counter-intuitive thinking that has ruled participants’ thinking was finally exposed.… Read more

Front month NYMEX posted over the psychological mark of $100, so now everyone will assume that much higher levels are imminent. But surrendering $1.40 by settlement shows a good deal of skepticism remains as concerns about the effect on the economy of high fuel costs cast doubts on hopes for energy demand growth as a consequence of monetary stimulus.… Read more

The ECB may… The Fed did… and risk assets have taken off. Oil prices have now sped past any benefit that stimulative action may have wrought. More likely, the powerful overnight rally is a response to rising fears of supply disruption in the Middle East than expectations of demand recovery.… Read more

Spending most of the initial morning hours at the top end of the session’s range, prices finished negative on the session and broke a five day winning streak in the process. Clearly, the surprisingly bearish stockpile reports offset a new four month low in the US dollar and a favorable German court ruling on the ESM bailout fund.… Read more

After surging marginally above $98.00 per barrel, October WTI prices have fallen back below $97.50. The markets rallied on the German Supreme Court decision allowing German participation in the ESM bailout fund. But the effects have not been exactly resounding. Some of the decision was surely priced in, but the oil market fundamental reality continues to push back against the tide of monetary support.… Read more

October WTI prices remain confined to a narrow segment of the upper reaches of the recent trading range. Yesterday’s relatively low volume session saw prices grind higher in the afternoon hours, managing a slightly higher settlement. Participants received mixed signals from the headlines, first from weaker Chinese economic data over the weekend that weighed on global oil demand prospects, then on the continuing hope for another round of quantitative easing at this week’s…