Crude dropped 70 cents, distillate fell 3.15 cents, and gasoline declined 1.70 cents on news that unemployment increased unexpectedly. The talk of high unemployment recovery is really talk of decreased economic activity because unemployed people ahve little if any discretionary money and therefore they are not spending money. The continuing fall of distillate is a bearish economic indicator especially as we approach winter months. Distillate power trucks, trains and planes that move people and goods.
Interesting counter comment from ExxonMobil CEO Rex Tillerson about OPEC not being in as much compliance as was reported yesterday. Tillerson says that rather than being 82% compliance OPEC is in the 65% neighborhood because as prices approach $75 the temptation to cheat increases. Cheating would seem to be counterintuitive as it inevitably leds to oversupply and falling prices.
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