17 days ago, 5/3/10, crude ended trading at $86.18. Today, crude ended trading 21.1% less than what now seems like a lofty peak beyond $86. The news keeps getting more and more bearish: more than expected unemployment claims, continued depressed demand, the strength of the dollar and the weakness of the euro, and Cushing approaching its holding capacity. The Contango premium between the front month and the further out month is nearly $3/bbl.
The news about gasoline reflects a similar plunge. Gasoline ended trading on 5/3 at $2.4309 and it is now 48.7¢ lower. Distillate is in the same downward spiral, $2.3455 on 5/3 and down 46.2¢. Since the beginning of the year, analysts and traders have been trading as if the economy would improve in the very near term and this pushed crude up to the mid $80s trading range. The summer driving season is upon us and the economy does not look robust enough to consume the growing inventory build.
Today, crude -$1.67, $67.91, gasoline -7.48¢, $!.9442, distillate -6.41¢, $1.884. Street price down 5¢ to $2.489.
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