Good morning, its Wednesday May 4th and markets are somewhat reluctantly rising above the trading range of the past few weeks.
The USD is off 0.66% today even as the European Central Bank1 decided to hold rates, again, as expected. We’ve been following the USD carefully over the past few weeks, and Gold as well – last week’s ABX entry continues to play out for those who remain long the stock; other Golds are so far rising on the “surprise” weakness in the USD.
``People are going to question just how much more tightening we’re going to get this year,’’ said Michael Metcalfe, senior strategist in London at State Street Global Markets, a unit of the largest provider of investment services to institutions. ``The pressure on the dollar is going to continue.’’
Crude: EIA Weekly Petroleum Status Report
U.S. crude oil imports averaged nearly 10.3 million barrels per day last week, down 604,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged nearly 10.2 million barrels per day, which is 114,000 barrels per day more than averaged over the comparable four weeks last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged over 1.0 million barrels per day for the fourth consecutive week, the first time this has ever happened. Distillate fuel imports averaged 287,000 barrels per day last week.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) rose by 2.6 million barrels from the previous week. At 327.0 million barrels, U.S. crude oil inventories are above the upper end of the average range for this time of year, and the highest since the end of March 2002. Total motor gasoline inventories increased by 2.2 million barrels last week, putting them at the upper end of the average range. Distillate fuel inventories declined by 0.3 million barrels last week, and are now in the lower half of the average range for this time of year. Total commercial petroleum inventories rose by 5.0 million barrels last week, and remain in the upper half of the average range.
Total product supplied over the last four-week period has averaged nearly 20.4 million barrels per day, or 0.9 percent more than averaged over the same period last year. Over the last four weeks, motor gasoline demand has averaged over 9.1 million barrels per day, or 0.9 percent above the same period last year, while distillate fuel demand has averaged over 4.2 million barrels per day, or 2.2 percent above the same period last year. Kerosene-type jet fuel demand is up 2.5 percent over the last four weeks compared to the same four-week period last year.
Gasoline demand has shrunk somewhat – most weeks its been at 2%; in the past 10 reports or so its only been near 1% twice. Meanwhile jet fuel demand continues to rise and stocks are lower. Refiners will find some support in this – certainly when the current dip is done in the sector, the refiners are a place to be. Unfortunately everyone knows this and everyone is already long the group, which probably means they have to go lower for a while!
While Crude dropped fairly significantly following the report, the rebound has brought price right back to where support may be found.
CLM5 – 20 minute chart
On the smaller time frame chart we can see where the line in the sand is currently:
... suggesting that if price can hold above 49.50 and start to trend higher intraday, it will catch many folks off guard. If not, we expect 49 will break and head lower until next week.
US Market Calendar
Canadian Market Calendar
- 8:15 am: Foreign Reserves – Apr.
- 10-year bond auction
Earnings and the Federal Reserve
For earnings highlights, please see today's WSJ Earnings Calendar.
For a list of upcoming speeches, congressional testimony, Federal Open Market Committee material, and statistical releases, please visit the What's Next page of The Federal Reserve Board website. Recently released Federal Reserve Board material, including market moving FOMC decisions and speeches by members, will be found on their What's New page.
1 Dollar Falls Against Euro, Yen; Fed May Slow Rate Increases
2 April ISM services index falls to 61.7%
3 EIA Weekly Petroleum Status Report
05.05.04 11:18 #