Thursday, July 1, 2010

Crude Oil Inventories

A drop in imports made for a 2.0 million barrel draw in oil stocks for the June 25 week. Imports fell to an in-trend 9.5 million barrels per day, down from last week's 2010 high of 10.1 million. Refineries increased output, feeding a 0.5 million barrel build for gasoline stocks and a 2.5 million build for distillates.

Gasoline demand is a plus for the report, at a year-to-date best of 9.3 million barrels per day for a plus 1.5 percent year-on-year rate. Distillate demand softened slightly to 3.8 million barrels but continues to show a strong year-on-year rate of 10.9 percent that reflects industrial activity

Oil is selling off in early Globex trading. I did not see WTI touching $74/b again until a new high of $83/b:

Reasons for pull-back:

1. Supply issues in Kushing, Oklahoma still remain a large concern.
2. Couple this with bad economic data and/or fear of stagnant global growth
3. Strong Dollar vs. Loonie, Aussie, and Sterling

I will stay cautious and watch the tape closely on this. If I see $72.50-73.00 buying may be a viable option.

Related ETFs: iShares S&P GSCI Commodity Indexed Trust (GSG:US), PowerShares DB Oil Fund (DBO:US), United States 12 Month Oil Fund LP (USL:US)

Patrick M. Ambrus
Managing Partner
Analyze Capital LLC
Twitter: Analyze Capital

1 comment:

  1. Weekly to me the trends are down, catching whipsaws to the upside would be trading against the trend making lower highs. I base this off my USO analysis. make sure you watch very closely if trading :)


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