January 31, 2012

Equities fell and the dollar rose and these two factors and continuing worry about the Europe's economy led to small increases in crude and products. It is interesting that Brent and both products have experienced large increases this month whereas at month's end WTI was pretty much where it was a month ago at the end December 2011 when looking at month end January 2012:

Commodity January 31 January 30 Δ December 30 Δ

WTI $98.48 $98.78 -30¢ $98.83 -35¢
Brent $111.00 $110.75 +25¢ $107.35 +$3.65
RBOB $2.8874 $2.8707 +1.67¢ $2.6863 +1.67¢
Distillate $3.0628 $3.0518 +1.10¢ $2.9350 +12.78

January 27, 2012

Shrinking refinery capacity represents supply when it intersects falling gasoline demand as the market settled at highest NYMEX price for gasoline in 5 months. This 14¢ uptick over the past week occurred when there was barely any NYMEX crude price movement in the same week. The industry decided that only the most efficient could continue refining and refinery closures are being felt in the form of higher prices.

For the week, WTI+$1.10, $99.56; Brent+$1.60, $111.46; RBOB+14.24¢, $2.9268; HO+8.2¢, $3.0704.

January 25, 2012

NYMEX and Brent crudes went in opposite directions today as the Fed announcement on continuing low interest rates aided a small rally for WTI while negative news on Britain's GDP caused concern for Brent traders. Futures fell initially with the release of the EIA reports but the Fed's announcement reversed course and caused a modest rally.

Inventory and demand reports came out today. Crude built inventory as imports increased while gasoline and distillate inventories drew down as demand was better than forecast. However, refinery utilization was at 82.2%, a drop of 1.5%.

Today, WTI+45¢, $99.40; Brent-34¢, $109.81; RBOB+2.88¢, $2.8338; HO-0.5¢, $3.0192.

January 23, 2012

European Union agrees to ban Iranian oil despite Iran's threats to close Straits of Hormuz should embargo be enforced. Saudis promise to increase production to make up for losses while China and India remained poised to buy more from Iran. Euro strengthens despite euro zone inability to make a deal with Greeks concerning sovereign debt problem.

Today, WTI+$1.12, $99.58; Brent+72¢, $110.58; RBOB-0.65¢, $2.7779; HO+2.14¢, $3.0098.

January 20, 2012

Hong Kong Shanghai Bank released China's manufacturing index showing a third straight month of falling output and exposing the reality behind the Chinese government's publication of 8.9% GDP growth at earlier this week. The dollar rose over the euro based on the continuing debt negotiations with Greece makes the dollar a better investment than oil and this further aided crude's decline. These developments further highlight the fundamentals of weak U.S. gasoline demand and sufficient supply availability given the economic activity.

A lot of price movement mostly down towards week's end: WTI-24¢, $98.46; Brent-18¢, $109.86; RBOB+5.02¢, $2.7844; HO-3.88¢, $2.9844.

January 17, 2012

China's announcement of 8.9% GDP growth in 4Q 2011 and the fall of the dollar vs. the euro in currency trading led to a 2% jump in NYMEX prices and the earlier 1.2% increase in Brent.

Today, WTI+$2.01, $100.71; Brent+$1.35, $111.39; RBOB+3.71¢, $2.7713; HO+1¢, $3.0372.

January 13, 2012

France's credit rating was downgraded one level causing the euro to falter and bringing crude down as well. WTI fell 0.4% from yesterday while Brent dropped 0.9%. Fears of a Western embargo of Iranian oil were allayed by more European dithering and secret negotiations about the nature of Iran's nuclear program. Goldman Sachs is once again talking up prices as they announced their forecasts for the year including $123.50/barrel NYMEX crude by year's end.

For the week, WTI-$2.86, 98.70; Brent-$3.02, $110.04; RBOB-1.74¢, $2.7342; HO-4.3¢, $3.0272.

January 12, 2012

There seems to be a lessening of tension between Iran and the West despite the crazy statements Hugo Chavez and Mahmoud Ahmadinejad are making about bombing the U.S. The Obama Regime seems to want to play down the threats made by the Iranian President and the Venezuelan Dictator and this allows the Europeans to feel that supplies are more secure. These events led to the second straight day of falling prices and today's settlement dropped below the $100 level for the first time since two days before the New Year's. Traders are ignoring the threat of a strike by oil workers in Nigeria and settling for the good news about the Straits of Hormuz.

Today, WTI-$1.77, $99.10; Brent-$1.17, $111.07; RBOB-3.2¢, R2.7633; HO-1.0¢, $3.0541.

January 9, 2012

Today saw a rare event when the dollar and crude both dropped in the markets. German manufacturing fell in November and that is certainly bearish news for the euro watchers but there seems to be a lessening of tension about the Iranian threats to close the Straits of Hormuz since the Saudis have announced they would provide for any loss of supply. There are oil related problems everywhere but analysts are focused on economic and currency issues rather than oil fundamentals and the crude and product declines were quite moderate.

Today, WTI-25¢, $101.31; Brent-88¢, $112.18; RBOB+0.74¢, $2,759; HO+0.28¢, $3.073.

January 6, 2012

Traders placed more importance on the falling euro and the threat of a European recession than on very good news on the number of new jobs created in December. Hungary's bond downgrade may not directly affect the euro but it does affect European banks and thus the euro fell. It is also likely that traders discounted the first wave of jobs created news awaiting the downward revisions next week as well as being aware of the temporary nature of the Christmas season job growth. The market also seems to be discounting all the Iranian threats to close the straits of Hormuz and close off 20% of the world's crude supply.

Despite the second straight day of decreases in a short trading week, NYMEX rose 2.8% and Brent jumped 5.3% in four days of trading while heating oil shot up 4.9% and gasoline rose 2.4%.

For the week, WTI+$2.73, $101.56; Brent+$5.71, $113.06; RBOB+6.53¢, $2.7516; HO+14.32¢, $3.0702.

January 3, 2012

The weakening dollar, higher stock prices and reports of improved economic performance led to a 7 month high for crude. The year is starting out strong but it was also a day when there was little news about the euro and the debt problems across the pond. The Iranians continue to rattle their sabers and that is factored into the riskiness of supply.

Today, WTI+$4.13, $102.96; Brent+$4.78, $112.13; RBOB+6.23¢; $2.7486; HO+10.32, $3.0382.