September 30, 2010

It has been an event-filled day. Crude briefly jumped over the $80 barrier before settling barely below this marker. Gasoline and distillate followed suit for price levels not seen since early August. Just to emphasize the direction of the market, Brent futures settled at $82.36 on the I.C.E.

Obviously, the stock market rise has given some impetus to the commodities market but events in the economy seem to be mirrored by fundamentals in the oil markets. However, 2 revisions of the GDP are worrying because there may be some effort to manipulate the markets this close to the elections just as there are rumblings that the Fed's easy money policies are allowing companies to buy stock relatively easily.

U.S. GDP was revised upward to 1.7% from 1.6% but the original estimate was 3.7%.

Gasoline demand did grow 6.1% to 9.38 million barrels daily. There was a draw on crude inventories of 500,000 barrels. More telling was the draw on gasoline of 3,500,000 barrels.

For the month, crude +$8.18, $79.97; gasoline +15.54¢, $2.0448; distillate +24.96¢, $2.244.

September 28, 2010

Crude fell in a sideways motion but it fell nonetheless. Both products increased slightly. The dollar weakened but the continuing worry about inventory and abundant supply made for the slight drop in the crude futures price. It is not just the supply glut that worries analysts but the size of crude and product inventories when compared with supply availability of the past 20 years. Equities may have risen but there is little faith in the economic revival and in a return of sustained robust demand.

Today, crude -35¢, $76.16; gasoline +1.5¢, $1.963; distillate +0.99¢, $2.1328.

September 27, 2010

Crude and products were treading water, moving up and down throughout the day but settling slightly higher than Friday's close. Equities were down but all indications are that there is a huge supply surplus worldwide and no one wants to be caught with high priced product any time soon.

Today, crude +7¢, $76.51; gasoline +0.15¢, $1.948; distillate -0.79¢, $2.1229.

September 24, 2010

Demand is still down and supply is plentiful. The economic picture is not promising but the dollar fell against the euro and that was enough to cause crude and products to increase over yesterday and to show solid gains over last week. There is a fundamentals reason why prices are up as many refineries will do turn arounds to retool for winter product production.

For the week, crude +$2.83, $76.44; gasoline +2.77¢, $1.9465; distillate +3.17¢, $2.1308.

September 23, 2010

The rising dollar helped crude overcome inventory builds and increases in jobless claims and climb moderately today.

Crude +0.53¢, $75.22; gasoline +1.76¢, $1.9176; distillate +0.84¢, $2.115.

September 22, 2010

The weaker dollar was not able to overcome the inventory build for crude and products allowing for a small drop in crude and product futures. Analysts were expecting a draw on inventories but the EIA report, released at mid-morning, showed a build for crude and both gasoline and distillate began to fall after rising earlier in the day.

Today, crude -26¢,$74.69; gasoline -2.79¢,$1.90; distillate -2.29¢, $2.1066.

September 20, 2010

Equities rose and oil followed and enough analysts felt comfortable with today's economic news that crude and both products rose today for the first time in 5 days. Fundamental supply issues remain problematic. Even if there are inventory draws this week, stock levels will be higher than any 5 or 10 year average and that is occurring while refinery utilization is declining; low production and lower demand is a bad combination.

Today, crude +$1.22, $74.83; gasoline +3.05¢, $1.9493; distillate +4.11¢, $2.1402.