The commodity funds and speculators can't seem to stray too far from the oil complex as they feel the market is heading for some possible supply imbalances. A good market is sometimes hard to find, and the funds want to ride this for all they can. |
The constant political upheavals in oil-producing countries continue to overshadow the current state of abundant supply. The line between oversupply and under-supply has never been thinner. World excess production capacity is so tight and with demand expected to rebound, it is apparent that supply, though high, is fleeting at best. |
The correlation between high oil prices and stocks has not been day-to-day. Sometimes the stock markets can ignore high prices, and the big debate is when will the prices get so high that they hurt the economy. |
The debate is how cold will it get and for how long. |
The decline in demand should be short-lived. It will be a race between supply and demand. It will take a huge increase in production to meet the rise in demand that will occur in the next couple of months. |
The EIA data indicate there's a lot of crude out there, |
The EIA data indicate there's a lot of crude out there. But even with refinery activity increasing, refineries seem to be having difficulty building up distillate supplies. |
The exceptionally cold temperatures at the beginning of December have been replaced by a mild spell at the end of the year that pushes the price of energy down in a period of low trading volume. |
The first round of serious profit taking may signal oil and gasoline prices might have finally hit its short term peak. |
The government is trying to relieve this crisis but there is little they can do. I don't think that crude-oil production will be close to pre-storm levels until December. |
The IEA report yesterday and the Fed point to a limited impact by the storms on U.S. demand. It looks like the drop in production is bigger than the fall in demand. |
The inability to follow through yesterday and break through $58 makes it likely that we are close to the bottom and prices are set to rise. Demand is starting to improve and distillate supplies continue to fall. It will have to get cold at some point and we will be in trouble. |
The inability to follow through yesterday and break through $58 makes it likely that we are close to the bottom. |
The main driver today is Tropical Storm Rita. We really can't afford to lose more production. |
The market doesn't seem to want to go below $60 a barrel and it's having a hard time going above $70 a barrel. The question is, which way do we break out? |