Greenspan talked about irrational exuberance in the 90's and today's trading showed some of that absurdity. Crude inventories rose as imports increased. Gasoline inventory was also sharply up and predictably, because of the bad weather, distillate stocks fell but nowhere near the expected level. However, the dollar dropped and that alone led to ascending prices for crude and product. The technical traders and analysts couldn't be bothered with fundamentals. Today's increases will lead to greater volatility as demand outside of heating oil remains weak. Floating storage that is still out there was purchased at lower prices and makes these prices above $80 unsustainable.
Big fact to remember is that refinery utilization rates were below 80%. With turnarounds likely in January and February, these rates will stay low but they will also draw down on stock piles but real demand will still be low. Second big fact to remember is that gasoline demand and total petroleum demand declined last week.
For the day, crude +$1.15 to $82.93, gasoline +0.75 cents to $2.133, distillate +0.44 cents to $2.199.
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