Lets dive into the crude and oil picture here – this morning we had a number of long swing candidates related to the oil sector show up in our scans – given how far price has run in many of these names it does make sense to trade a little more defensively, particularly when establishing new positions at these levels.
This week’s petroleum status report helped support price once again, showing demand remains strong:
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) declined by 1.0 million barrels from the previous week. At 294.3 million barrels, U.S. crude oil inventories are around the middle of the average range for this time of year. Distillate fuel inventories decreased by 3.0 million barrels last week, and are in the lower half of the average range for this time of year. Total motor gasoline inventories rose by 0.5 million barrels last week, and are in the upper half of the average range. Total commercial petroleum inventories fell by 5.0 million barrels last week, but remain in the upper half of the average range.
Total product supplied over the last four-week period has averaged nearly 20.9 million barrels per day, or 2.2 percent more than averaged over the same period last year. Distillate fuel demand over the last four weeks has averaged nearly 4.4 million barrels per day, or 0.3 percent above the same period last year. Motor gasoline demand averaged 8.8 million barrels per day, or 1.5 percent above the same period last year, while kerosene-type jet fuel demand is up 0.8 percent over the last four weeks compared to the same four-week period last year. More >
Resulting in price moving over $1 today:
But more importantly, so-far reconfirming support:
Again the mid-point of a tall up bar helps to identify where support may come in. This also happens to be the 50% retracement of the rally in crude from December’s lows.
What seems to be consistent from the weekly reports is that demand remains strong, which would suggest that prices will remain elevated since any disruption to supply will have a magnified effect. Last year, prices remained high as supply itself was insufficient to fully carry the market through peak periods, further complicated by weather related and other supply distruptions. Has the market fully factored this in for this year?
05.02.09 11:45 #