While crude oil might be held back by last week's US inventory readings, the combination of a risk-on vibe and ongoing Iranian saber-rattling leaves the bull camp with the edge to start today. In fact, with February crude oil threatening the highest price levels since early December in the early going, the bull camp looks to have the advantage of the headlines. With Iran calling for the absence of foreign forces in the Gulf and the US apparently signing into law new more specific sanctions against Iran over the weekend, the battle lines appear to be drawn between the two verbal combatants. The addition of favorable Chinese PMI data and potentially dovish dialogue from Chinese officials could also be supportive to energy, as do supportive currency market action and noted gains in US equities. While the EIA crude oil stocks report last week showed an unexpected build, current supplies are still 11.947 million barrels below year ago levels. Part of the build last week came from a notable increase in imports on the week, which jumped to a rate of 8.99 million barrels per day. Another reason for the recent build of crude oil stocks might have come from the closure of the US Houston Channel. The Commitments of Traders Futures and Options report as of December 27th for showed non-commercial traders were net long 210,278 contracts, an increase of 5,300 contracts for the week. Non-commercial and non-reportable traders combined held a net long position of 228,605 contracts, an increase of 5,281.
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