Bullish sentiment in the energies was suddenly and significantly improved in the wake of a much sharper slide in US crude oil inventories. While the number might be adjusted at some point in the future and the slide might be a one-off weather influence the big decline prompted the energy trade to jump to conclusion that US demand was stronger than expected and perhaps that US production was softening. Others will contend that the sharp decline in gulf coast imports was a one off weather issues while others suggests that news of declining US inventories is the result of expanding US crude oil exports to Europe. For the time being, US crude oil exports are apparently more of a psychological impact than an actual barrel impact. Another supportive development from the EIA report yesterday was the realization that the Refinery Operating rate jumped up sharply as that increases the call on crude supply. Just to add to the bulls quiver today is confirmation of ongoing contraction in Iranian oil production in Iran will rise by 300,000 barrels per day by the end of 2016. The near term upside target is 4904. The next area of resistance is around 4835 and 4904. 1st support hits today 4637 and below there at 4508. If you have any questions or would like to discuss the futures markets further please feel free to give me a call at the trade desk.
Series 3 Licensed
Senior Market Strategist
Follow Bob on Twitter @Bob_Haberkorn.
Bob started his career in 2005 as a broker with Lind-Waldock. He is often quoted in industry sources, such as the Wall Street Journal in regards to precious metals and the copper market.