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Tag Archives: gasoline stocks

COT Black Is Partially Back With A Lot of Towels

The Commodity Futures Trading Commission (CFTC) is in a bit of a tough spot. Being subject to the federal government shutdown meant shutting down the various Commitment of Traders (COT) reports for all the products listed on the exchange. There are a lot of them. Though the government and therefore the CFTC has reopened, it is going to be some time before they catch up (assuming they can before the next shutdown). The plan is for two releases per week in chronological order until that gets...

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Elections And Morbid Contango

As always, it’s about the whole thing. A true economic boom spreads out real gains to the vast majority of the population. There will always be some proportion of people who are left out. But in the good ones, the true upswings, that share is minimal. This is the big problem right now, especially as GDP has been positive in a lot of places for a long time. It is what confuses people into thinking there has to be a boom. The sad fact is that economic output all over the world, the US included,...

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COT Black: Powell Better Thank Congress While He Can

Who can Jerome Powell thank for the PCE Deflator? Not Janet Yellen who handed off to him instead “transitory” factors. Nor was it globally synchronized growth which was supposed to have been the deciding element. Instead, it appears more and more that the only place where Chairman Powell might legitimately offer his gratitude is the US Congress. We have to work backward a little bit to get there, but it’s an unusually straight line this time. The PCE Deflator has been now at the 2% policy...

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COT Black: All The Trades Are Crowded Here

Watching the crude oil market over the past few months has been a study in winding a rubber band, or a game of chicken. Each week it has been largely the same thing repeated: oil prices gently rise, backwardation in the futures curve keeps deepening, Money Managers in the futures market bet on higher oil, Dealers bet even more against them. The massive short position built up by dealers has been further offset to a small degree by the oil producers themselves. With inventory declining,...

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COT Black: Bad News For Jerome, Swap Dealers Seem Really Convinced

US domestic stocks of crude oil continue to be quite high and now the futures curve is only a few pennies in the front month contract from being fully backwardated again. Contango is gone, which suggests that oil market is in sight of achieving some measure of balance. That anticipated equilibrium, however, is registering at less than $57 rather than being anchored somewhere much, much higher in pricing. Instead of geopolitical concerns pushing up the front end prices, including the spot...

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Huge Crude Stakes

There is a titanic struggle going on right now in the oil market. On the one side of the futures market are the usual pace setters, the money managers. Last week, the latest COT data available, they went the most net long since March. If it continues, it will close in on the most positive futures position since the record long they established back in February. Normally that would be insanely bullish for oil prices. But just as in February/March another part of the futures market has...

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COT Black: Crude Balance Here?

Oil prices have had a very good run for several months now. Dating back to the recent low reached June 21, WTI is up an impressive 35% to a new two-year high. Crude hasn’t traded at $57 since June 2015. During this latest increase, the oil futures curve has finally achieved backwardation (which isn’t necessarily permanent). The long-awaited normalization is as of now nearly complete. There is still some contango lingering in the front months, if only through the April 2018 contract (the Dec...

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Harvey’s Muted (Price) Impact On Oil

The impact of Hurricane Harvey on the Gulf energy region is becoming clear. There have been no surprises to date, even though the storm did considerable damage and shuttered or disrupted significant capacity. Most of that related to gasoline, which Americans have been feeling in pump prices. According to the US Department of Energy, as of August 31, 10 refineries had been shut down with a combined capacity of 3.01 million barrels per day (mpd). That is equal to about 32% of Gulf coast...

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Forget Draghi, Crude Matters

Despite Mario Draghi’s supposedly misinterpreted comments earlier this week, there are global indications that the best of this round has already been reached. Policymakers are always going to claim things are improving, that much is given. But there is tremendous difference between that and what has occurred, especially if it is indeed rolling over worldwide. The earliest indicators for China’s economy in June signal that the manufacturing sector may be poised to decelerate, while other...

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Oil Price is Oil Inventory is Reflation is Economy

Drillers are going to drill. What else can they do? OPEC can discuss cuts and maybe even stick to them for a while, but the rest of the world isn’t bound by those tactics. That is what they are, PR aimed at firming up prices. In the end, this story, as it has been from the beginning in late June 2014, is about demand. Domestic US production is up again. The weekly estimates from the US EIA show output in barrels are right around highest level since August 2015. The Federal Reserve’s estimates...

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