The European sovereign debt crisis exemplified by the predicament in Greece continues to drag the euro down and raises the dollar causing oil to decline in the market. Fundamental factors such as the high levels of inventory push the price down further and today crude's price almost ended below $70. Crude has now fallen 5 sessions consecutively. Already there are expectations of even more inventory build at the Cushing Terminal but the limit of 40 million barrels is already being approached as last week's inventory was over 37 million barrels.
The biggest worry is that there is no economic recovery is really occurring and therefore fuel demand will not rebound later this year. The $5 premium on contango is predicated on demand increase later this year due to improving economic activity.
Today, crude -$0.89, $70.08, gasoline -7.82¢, $2.0422, distillate -7.01¢, $2.0422. Street -6¢, $2.509.
No comments:
Post a Comment