Analysis and Recommendations:
Crude Oil inventories came in under expectations, surprising the market and driving prices upwards. Crude is currently trading up +1.07 at 107.14
Crude-oil continued to gain after a weekly government report showed a decline in inventories. The Energy Information Administration said crude inventories declined 1.2 million barrels in the week ended March 16. Analysts polled by Platts forecast an increase of 2.1 million barrels for the week. The EIA also reported gasoline stockpiles were down 1.2 million barrels, and distillates supplies increased 1.8 million barrels. The analysts surveyed by Platts had expected gasoline and distillates supplies to decrease 1.8 million and 1.6 million barrels, respectively.
Last week an erroneous report about the Obama Administration considering the release of crude oil drove market prices down as low as 103.00 before the rumors were stopped and the story retracted.
Marketwatch.com reported today:
Saudi Arabia's comments show how the country is trying to ease the geopolitical premium in the market with the tensions with Iran, said Tariq Zahir, a managing member with Tyche Capital in the New York area.
Another aspect that can put pressure on the energy market is a release of crude from the Strategic Petroleum Reserve, which has been talked about since last week.
President Barack Obama is scheduled to visit an oil hub near Cushing, Okla., the delivery point of Nymex oil, and markets would not be surprised to see the administration announce a release of crude oil from the SPR, Zahir said.
There is no supply and demand reason that oil should be at this level, regardless of the oil embargo and rhetoric from Iran. With Global reductions in growth estimates and an overall slowdown in China, overall oil demand continues to decline. Now that the US is a net exporter of petroleum products, there is not financial reason for this price.
Oil over 100.00 per barrel is a threat to the economic recovery of the US and should be viewed as such and the US has built the Strategic Reserves for this purpose.
Economic Events: (GMT)
- This Week in PetroleumRelease Schedule: Wednesday @ 1:00 p.m. EST (schedule)
- Gasoline and Diesel Fuel UpdateRelease Schedule: Monday between 4:00 and 5:00 p.m. EST (schedule)
- Weekly Petroleum Status ReportRelease Schedule: The wpsrsummary.pdf, overview.pdf, and Tables 1-14 in CSV and XLS formats, are released to the Web site after 10:30 a.m. (Eastern Time) on Wednesday. All other PDF and HTML files are released to the Web site after 1:00 p.m. (Eastern Time) on Wednesday. Appendix D is produced during the winter heating season, which extends from October through March of each year. For some weeks which include holidays, releases are delayed by one day. (schedule)
- Heating Oil & Propane Update (October-March) Heating Oil, Propane Residential and Wholesale Price DataRelease Schedule: Wednesday at 1:00 p.m. EST
- Weekly Coal ProductionRelease Schedule: Thursday by 5:00 p.m. EST
- Weekly NYMEX Coal FuturesRelease Schedule: Monday by 5:00 p.m. EST
- Coal News & MarketsRelease Schedule: Monday by 5:00 p.m. EST
- Natural Gas Weekly UpdateRelease Schedule: Thursday between 2:00 and 2:30 p.m. (Eastern Time)
- Weekly Natural Gas Storage ReportRelease Schedule: Thursday at 10:30 (Eastern Time) (schedule)
Crude Oil Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3