January 31, 2012

Equities fell and the dollar rose and these two factors and continuing worry about the Europe's economy led to small increases in crude and products. It is interesting that Brent and both products have experienced large increases this month whereas at month's end WTI was pretty much where it was a month ago at the end December 2011 when looking at month end January 2012:

Commodity January 31 January 30 Δ December 30 Δ

WTI $98.48 $98.78 -30¢ $98.83 -35¢
Brent $111.00 $110.75 +25¢ $107.35 +$3.65
RBOB $2.8874 $2.8707 +1.67¢ $2.6863 +1.67¢
Distillate $3.0628 $3.0518 +1.10¢ $2.9350 +12.78

January 27, 2012

Shrinking refinery capacity represents supply when it intersects falling gasoline demand as the market settled at highest NYMEX price for gasoline in 5 months. This 14¢ uptick over the past week occurred when there was barely any NYMEX crude price movement in the same week. The industry decided that only the most efficient could continue refining and refinery closures are being felt in the form of higher prices.

For the week, WTI+$1.10, $99.56; Brent+$1.60, $111.46; RBOB+14.24¢, $2.9268; HO+8.2¢, $3.0704.

January 25, 2012

NYMEX and Brent crudes went in opposite directions today as the Fed announcement on continuing low interest rates aided a small rally for WTI while negative news on Britain's GDP caused concern for Brent traders. Futures fell initially with the release of the EIA reports but the Fed's announcement reversed course and caused a modest rally.

Inventory and demand reports came out today. Crude built inventory as imports increased while gasoline and distillate inventories drew down as demand was better than forecast. However, refinery utilization was at 82.2%, a drop of 1.5%.

Today, WTI+45¢, $99.40; Brent-34¢, $109.81; RBOB+2.88¢, $2.8338; HO-0.5¢, $3.0192.

January 23, 2012

European Union agrees to ban Iranian oil despite Iran's threats to close Straits of Hormuz should embargo be enforced. Saudis promise to increase production to make up for losses while China and India remained poised to buy more from Iran. Euro strengthens despite euro zone inability to make a deal with Greeks concerning sovereign debt problem.

Today, WTI+$1.12, $99.58; Brent+72¢, $110.58; RBOB-0.65¢, $2.7779; HO+2.14¢, $3.0098.

January 20, 2012

Hong Kong Shanghai Bank released China's manufacturing index showing a third straight month of falling output and exposing the reality behind the Chinese government's publication of 8.9% GDP growth at earlier this week. The dollar rose over the euro based on the continuing debt negotiations with Greece makes the dollar a better investment than oil and this further aided crude's decline. These developments further highlight the fundamentals of weak U.S. gasoline demand and sufficient supply availability given the economic activity.

A lot of price movement mostly down towards week's end: WTI-24¢, $98.46; Brent-18¢, $109.86; RBOB+5.02¢, $2.7844; HO-3.88¢, $2.9844.

January 17, 2012

China's announcement of 8.9% GDP growth in 4Q 2011 and the fall of the dollar vs. the euro in currency trading led to a 2% jump in NYMEX prices and the earlier 1.2% increase in Brent.

Today, WTI+$2.01, $100.71; Brent+$1.35, $111.39; RBOB+3.71¢, $2.7713; HO+1¢, $3.0372.

January 13, 2012

France's credit rating was downgraded one level causing the euro to falter and bringing crude down as well. WTI fell 0.4% from yesterday while Brent dropped 0.9%. Fears of a Western embargo of Iranian oil were allayed by more European dithering and secret negotiations about the nature of Iran's nuclear program. Goldman Sachs is once again talking up prices as they announced their forecasts for the year including $123.50/barrel NYMEX crude by year's end.

For the week, WTI-$2.86, 98.70; Brent-$3.02, $110.04; RBOB-1.74¢, $2.7342; HO-4.3¢, $3.0272.