Fundamentals came into play today during a light day of trading due to the New Year's holiday. On this last trading day of the year, the market noted a build in distillate and a smaller than expected draw for crude. Gasoline inventory drew down as expected. Together with manufacturing data from China that showed a slowing of growth, this lead to a fall in crude and product prices from yesterday. Crude fell below $90 but this seems high based on available supply and the current level of economic growth. This is why the announcement of the lowest jobless claims in two years did not keep the price moving up. The harder number to explain is the distillate inventory build that is happening amid snowstorms and cold weather.
Having an annual perspective gives a better understanding of what happened this year. Crude +$9.99, 12.5% increase, $89.82; gasoline 32.82¢, 15.9% growth, $2.3912; distillate +36.1¢, 17% higher, $2.4845.
See you in 2011.
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