Sometimes I feel like Don Quixote tilting at the proverbial windmill, but my colleagues here at Schaeffer's know that I am convinced that commodity experts may as well throw darts at a dartboard full of numbers to get their forecasts. In order to prove this point, let me quote directly from yesterday's Schaeffer's Market Recap, [today's] holiday-delayed crude inventories reports are expected to show a 700,000-barrel drop in crude prices. It was this belief that sent crude nearly $3 higher yesterday.
To prove my point that a group/pack/school of untrained simians may be able to determine our weekly forecast of crude inventory results, the Energy Department stepped forward and announced the expected 700,000 barrel drop KIDDING. Really, crude inventories increased by 2.8 million barrels during the past week. Gasoline supplies increased as well, adding 700,000 barrels. But the experts can take solace in the fact that distillate fuels slipped by 2 million barrels. At last check, crude had dropped $1.64 with its sites set on the $92 level (and lower?). Checking in on oil exchange-traded funds, the AMEX Oil HOLDRS Trust (OIH) is more than 1% lower and the Select Sector SPDR Energy Fund (XLE) is more than a percent lower as well.