November 21, 2011

There was hope early last week that the Congressional Super Committee would come up with a solution to the $15 trillion debt problem. As the days passed it seemed that there would be no agreement. Over the weekend it became obvious that there would be no solution as the super committee seems unable to come up with an agreement on what to cut.

There also seems to be no solution to the European debt problems as the Moody's seems set to downgrade France's credit rating while the PIIGS (Portugal, Ireland, Italy, Greece and Spain) seem unable to come up with the right set of austerity measures and borrowing. This news led to a fall in equities and the dollar's rise with oil playing its traditional role of following stocks and going counter to the dollar.

Today, WTI-49¢, $96.92; Brent-68¢, $106.88; RBOB+1.06¢, $2.489; HO-3.0382, $2.9943.

November 18, 2011

There was a little volatility in the market today as equities were up and the dollar was down while reports of manufacturing in the Philly area was reported to be down. Additionally. reports have come in that Spain is about to join Greece and Italy in having to pay greater than expected rates to bondholders as it begins to suffer from its own debt crisis. There is also some concern that Enbridge's pipeline reversal will bring enough production to market. The markets were worried about Europe and Spain's problems will only exacerbate the worry.

For the week, WTI-$1.48, $97.41; Brent-$6.60, $107.56; RBOB-12.54¢, $2.6038, HO$-13.29¢, $3.0325.

November 17, 2011

For most of this year as the premium between WTI and Brent grew, analysts maintained that the large and growing inventory at Cushing, OK, was artificially depressing prices as much of that stock was not easily available. Enbridge's announcement yesterday of its purchase of ConocoPhillips' share of a pipeline from the Gulf to Cushing and its intention to reverse the flow to allow refiners greater access to the inventory immediately boosted prices at settlement 3.2%. Too emphasize the point, Brent lost 0.5%. The reversed pipeline will alleviate the need for barges and rail lines to bring crude, especially Canadian and North Dakota crude, to refineries. The market reacted positively despite the Obama regime's delay in making a decision on the Keystone XL pipeline project.

Inventories fell last week by a million barrels but that was dwarfed by the Seaway pipeline news.

Yesterday, WTI+$3.22, $102.59; Brent-51¢, $111.88; RBOB+4.16¢, $2.6273; HO-3.67¢, $3.1346.

November 14, 2011

Traders were a bit restrained today as they reconsidered where futures settled last Friday and where it was headed today and this led to a 1% fall for NYMEX futures. The 7.3 increase in crude prices since November rolled in may not be tenable as gasoline demand continues to stagnate and the economy does not seem to be moving forward. Adding to the gloom was the fall of equities that was caused by the fall in the euro as there continues to be no resolution to the European debt problem.

Today, WTI-75¢, $98.14; Brent-$2.27, $111.89; RBOB-6.85¢, $2.5353; HO-0.94¢, $2.1622.

November 9, 2011

The bullish news of the falling inventory reports could not overcome the bearish news out of Europe that now four countries (Greece, Italy, Portugal, and Ireland) are facing sovereign debt default issues. This was brought into focus by the historically high yield of the Italian bonds now in the market. Italy is the third largest economy in the euro zone.

Equities and the euro also dropped as the dollar rose. Crude did its inverse dance with the dollar. Of note is that refinery utilization seemed to be moving in tandem with inventory going down 2.7% to 82.6. Refiners are squeezing inventory levels so that they don't get caught with higher price product at a later date.

Today, WTI-$1.06, $95.74; Brent-$2.69, $112.31; RBOB-6.22¢, $2.6442; HO-1.76¢, $3.0986.

November 9, 2011

November 7, 2011

Traders are watching headlines and not giving much weight to recent fundamentals moves. There seems to be a lot of attention paid to European political events concerning Greece and Italy and the seemingly positive news of regime change in Greece and Italy. Oil also seems to be moving away from its traditional relationships normally in the same direction with equities and counter to the dollar. Today, however, crude once again moved in concert with the dollar and opposite of equities. This seems to be a move making oil a haven for investors wanting value in case of recession or depression.

Today, WTI+$1.26, $95.52; Brent+$2.47, $114.44; RBOB+6.48¢, $2.7282; HO+4.91¢,$3.1198.

November 4, 2011

NYMEX crude seems fairly entrenched in the mid $90s where it has settled every day since October 27. There was a lot of news that caused a lot of intraday volatility but when settlement time came, prices have remained bullish. The failure of the G20 to make any agreement on what to do about Europe's sovereign debt crisis and the almost non-existent creation of jobs in the U.S. did not cause a downward movement but rather a continuing upward motion.

For the week, WTI+94¢, $94.26; Brent+$2.41, $111.97; RBOB+2.05¢, $2.6634; HO+2.78¢, $3.0707.

November 3, 2011

The market is in a strange mood and chose to believe in a modest increase in jobs while ignoring the imploding Greek sovereign debt deal and falling demand as evidenced by builds in crude and gasoline inventories. The markets also failed to recognize the Fed announcement that GDP forecasts for 2012 would be revised down. In this sea of of bearish news the market has chosen the one ray of bullish light, however slightly it moved in that direction.

Today, WTI+32¢, $92.51; Brent-20¢, $109.34; RBOB+0.28¢, $2.6272; HO-3.72¢, $3.0007.