At the end of August, the US Energy Information Administration reported that it had been overstating domestic demand for oil and energy products to a considerable degree. Using imprecise and lagging data, the calculations for the amount of product being exported overseas was understated by an average of 16%. That meant more output was being used elsewhere, thus less product [...]
Chinese oil imports surged again in August to the equivalent of 7.77 million barrels per day (mbpd). That was significantly more than July’s pace of 7.35 mbpd, and up an astounding 1.5 mbpd from August 2015. It was the highest rate of oil imports since April. The demand for commodities hasn’t been limited to just crude oil, as coal imports [...]
The most remarkable aspect of the WTI crude oil futures curve this month has been its amazing ability to maintain its shape no matter which direction or by how much. Previously, as “dollar” pressures either built or ebbed, the futures curve would either steepen at the front (liquidation pressure) or flatten toward more normal backwardation (easing of the “dollar” difficulties). [...]
Starting June 8, oil prices began falling again, reversing their more optimistic trend that had lingered since February 11 long after the usual correlation to CNY was broken. In fact, by the time WTI had peaked, CNY was already being meddled with again in clear PBOC interference. Despite being backward to what was 2015’s relationship of death, by July the [...]
Wholesale sales for June 2016 declined slightly, -0.6%, year-over-year. Since February, sales have flattened out in unadjusted terms. Seasonally-adjusted, wholesales sales rose nearly 2% from May 2016, and are up $17 billion from February. Of that increase, however, $11.5 billion was petroleum alone. Taking out the volatile swings in oil and oil prices, wholesale sales ex petroleum have been stagnant [...]
Domestic oil inventory rose in the latest week, updates from the US EIA show. That build broke a streak of nine consecutive weekly draws dating back to mid-May. It is not unusual for oil inventory to rise and fall in various weeks, but given the mechanics of oil prices of late there is an atypical edge and attention to any [...]
On February 6, 2008, oil prices (WTI) dropped to $87.16, the lowest price since the prior October. Oil had been rising as the market misunderstood and dramatically mispriced what was going on; buying on the idea of monetary policy accommodation in growing intensity, while at the same time not factoring the hidden monetary destruction that was far greater. It was [...]
It isn’t just that oil prices are falling, that is only one dimension of the full oil spectrum concentrating in the spot market. The more interesting and important information is contained within the whole WTI futures curve. As “dollar” funding pressure has built up since the front month peak on June 8, it has steepened the curve into deeper contango; [...]
Oil prices fell again today and it seems that gasoline is now on everyone’s mind. As noted last week, I don’t think that is the reason for the price action except in that it tells a very different story than the one in the media about “stimulus” hope. The significance of crude and gasoline is the difference in narratives and [...]
Industrial production in the United States remains caught up in the latest downward shift of the 2012 slowdown. The Federal Reserve estimates that overall industrial production contracted for the 10th straight month, falling 0.7% in June 2016. The degree of decline is relatively small, but as with so many other accounts the lingering of the condition for an only increasing [...]
Stay In Touch