This morning, the Energy Information Administration (EIA) issued its weekly Petroleum Status Report. In the week ended April 22, U.S. crude stockpiles rose by 2 million barrels. Still, the increase is below the Street’s expectation of 2.4 million barrels. Read more about Bullish Oil and Dovish Fed 04-27-16
As noted last week, we thought regardless of the Doha meeting outcome, the impact of that meeting on the oil market would be short lived. Yes, indeed. While in immediate reaction the breakdown of talks, oil fell more than 6 percent in overnight trading, it also bounced back quickly. Actually, both the West Texas Intermediate and Brent benchmarks finished in the green on Monday, which indicates that oil traders shrugged off the meeting. Read more about Oil Market Shrugs 04-20-16
Last week, we noted a large decline in U.S. crude inventory in the week ended April 1, as reported by the Energy Information Administration, the statistics and analysis arm of the Department of Energy. Today, the EIA reported that the stockpiles rebounded by 6.6 million barrels last week.
Softening the blow, however, gasoline inventory dropped by 4.2 million barrels; analysts had expected a 1.4 million barrel draw. With the summer, peak driving season, coming up, the strong demand for gas is seen as a very good sign for crude oil. Read more about Another Winning Trade 04-13-16
Contrary to previous messages from Saudi officials, Saudi Deputy Crown Prince Mohammed bin Salman recently stated in an interview that his country would not limit its oil production unless Iran and others agreed. Furthermore, he suggested that the desert kingdom would ramp up production if others—namely, Iran—did so. Chairman of the Supreme Petroleum Council, bin Salman outranks all Saudi oil officials, so his comments naturally raised questions whether the upcoming April 17 summit of OPEC and non-OPEC producers would be fruitful at all. Read more about Oil Drama 04-06-16
Last week, several regional Federal Reserve Bank chiefs made hawkish comments. Although most of the officials in question do not have a vote this year on the Federal Open Market Committee (FOMC), the U.S. central bank’s decision-making board, their commentary nevertheless raised the question whether the Fed holds as dovish a view as observers had assumed after its previous, mid-March, FOMC meeting. Read more about New Week, New Expectations 03-30-16
Five consecutive weekly gains had propelled the S&P 500 to within 4 percent of its all-time high, driven largely by the accommodative monetary policies of central banks, better oil pricing, and relief that the global economic situation may not be as bad as feared. Yesterday’s explosions in Brussels, however, serve as a reminder that terrorism is an ever-present risk, one over which our leaders have little control. While not terrible market action by any means, the positive momentum of recent weeks appears to have stalled in the last two days. Read more about A Pause to the Rally 03-23-16