Crude Oil Traders Defy Logic

Crude Oil Traders Defy Logic
Crude Oil Traders Defy Logic
Crude oil continues to gather steam adding 24 cents this morning to exchange at 97.63. There are no fundamentals that support the current price level. Although a global recovery in underway, the eurozone continues to tail behind, recent figures from China and the US show the recovery is not as strong as first expected. Implied demand continues to ease as should prices. Brent oil gained 22 cents to climb to 106.38 but the spread remains under $9 indicating an imbalance in price. US crude oil has gained recently due to the “polar vortex” which has kept the US frozen, increasing residential demand for heating, while at the same time airlines, trucks, busses and automobile travel has been limited reducing demands.

Yesterday’s weekly report by the US Energy Department (EIA) report,  showed that US crude oil inventories rose by 0.4 million barrels to 358.1 million barrels for the week ending on 31st Januaryoil 2014. Distillate stockpiles fell by 2.36 million barrels to 113.8 million barrels last week. This was against expectations of a decline. Oil prices closed higher by 0.2 percent in Wednesday’s trading session as a fall in distillate inventories supported prices. Data monitored by the Energy Information Administration showed that stocks of distillates fell for the fourth straight week by 2.36 million barrels to 113.8 million barrels last week. Overall crude oil inventories increased 440,000 barrels to 358.1 million barrels and total stockpiles have increased 7.85 million barrels in the past three weeks.  

Another factor that supported oil prices higher was the data that showed an increase in distillate demand by 6.1 percent to 3.99 million barrels a day in the last four weeks. This marks the highest level since Nov’13 and thus acted as a positive factor. It seems clear that energy speculators are doing their best to drive up prices and then will sell off to book profits leaving the commodity to tank.

oil gasSyria on Wednesday missed a deadline to hand over all the toxic materials it declared to the world’s chemical weapons watchdog. The latest in a series of winter storms hit the United States on Wednesday, dropping wet, heavy snow in the Northeast states that disrupted travel pushing oil prices and natural gas prices skywards. Natural gas is trading at 5.246 up by 105 points this morning as traders build the momentum to attempt the $5.50 price level again.  U.S. natural gas futures fell sharply Wednesday due to longer term mild weather forecasts, while next-day prices spiked to record highs on anticipation for immediate cold. Front-month natural gas futures on the New York Mercantile Exchange NGc1 closed down 34.5 cents, more than 6 percent, at $5.03 per million British thermal units. Traders can expect Natural gas prices to remain down for the day over long term mild weather forecast and higher natural gas inventories expected today. This morning there is seems to be a shift in the long term forecast to colder temperatures which is helping natural gas to continue its climb. The weather man can be a fickle friend. Heating oil also recovered and added 57 points to trade at 2.9944

 

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