February 26, 2010

There have been many revisions of economic news during the past year and I always wait a week or two for the revisions. I am therefore skeptical about the report of 5.9% GDP growth for 4Q 2009. I am less skeptical about the report that the number of vessels used for floating storage dropped 20% in January. That tells me there there's product movement and this normally flows from economic activity. Today's price increases were all about the improving economy and declining dollar.

For the week, crude +$0.13 to $79.64, gasoline 4.75 cents to $2.09, distillate +4.13 cents to $2.0241. Street price was $2.439.

February 26, 2010

Increased unemployment claims, lower than expected sales of new homes, falling durable goods sales, and high inventories overcame supply worries concerning the blizzard in the Northeast. Still crude is only $1 off last Thursday's price. The market is still trying to find a direction and it seems that prices above $80 are not sustainable.

Today, crude -$1.81 to $78.04, gasoline -5.64 cents to $2.0425, distillate -5.1 cents to $2.0425. Street prices are now $2.559.

February 23, 2010

Technical analysis pushed crude prices above $80 yesterday and the view was not as good at that price and so fundamental analysis led the price down today. Tomorrow the ultimate in fundamental analysis comes out with the publication of industry inventory.

The dollar did get stronger but the refinery worker strike in France is close to resolution. The release of the consumer confidence index led many traders to believe that demand will continue to be lower than expected.

Today, crude -$1.27 to $78.86, gasoline -5.3 cents to $2.065, distillate -4.99 cents to $2.0318.

February 22, 2010

The market is thinking short term and short term considerations are causing prices to rise. Demand continues at lower levels and refining utilization remains below 80%, 77.7%, at the end of January, but the ongoing strike at refineries and terminals in France is driving the price up. Normally when the dollar strengthens as it did today, oil falls. That was not true today as both dollar and oil rose.

Today, crude +$0.62 to $80.13, gasoline +3.29 cents to $2.118, distillate +1.91 cents to $2.118.

February 19, 2010

Demand is down so much that US fuel consumption in January was the lowest of the past 12 years. The raising of interest rates by the Federal Reserve today changed the dynamics of the market and crude stayed above $79. The French refinery strike was also worrying traders who are thinking that imports could be constricted.

Today, crude +$0.49 to $79.51, gasoline +1.51 cents to $2.0851, distillate +0.96 cents to $2.0626. Street gasoline price is up from a couple of days ago to $2.309.

February 18, 2010

This was one of those days when you could not understand why the market moved in a particular direction. Crude rose above $79 and both products made sizable gains but the inventory data was inconclusive. Gasoline and crude supplies showed a build but distillate showed a greater draw than expected. Refinery utilization was up 0.7% to 79.08%. This would seem to indicate that refineries were producing gasoline and consumers were buying less than expected. The cold weather the two weeks prior probably drew down the distillate inventory to explain the distillate draw.

Today, crude +$1.83 to $79.02, gasoline +6.78 cents to $2.07, distillate +6.78 cents. With all this volatility, street price was still at $2.239.

February 17, 2010

A sideways trading day as everyone is waiting for tomorrow's EIA inventory report.

Today, crude -$0.01 to $77.19, gasoline +0.32 cents to $2.0022, distillate -0.13 cents to $2.0022.