A larger-than-forecast gain in stockpiles helped push crude oil lower as weak demand left refinery operating rates at their lowest level in more than a year.
A pullback in the U.S. dollar and stocks has also helped to pull oil lower, which traded at $75.86 a barrel on friday following weaker consumer sentiment data from the U.S.
Friday, 13 November 2009
Wednesday, 11 November 2009
The crowded trade
The dollar carry trade continues to push riskier assets higher, with the risk of a reversal growing stronger.
Speculative long positions are now at a record in WTI crude on the NYMEX and gold on the Comex. The speculative rush is helping push yearly highs in global equities, currencies and commodities.
The carry trade will continue but is at risk of a game-changing event in the appetite for U.S. dollars. If this happens, the reversal in multiple assets simultaneously will be spectacular.
Speculative long positions are now at a record in WTI crude on the NYMEX and gold on the Comex. The speculative rush is helping push yearly highs in global equities, currencies and commodities.
The carry trade will continue but is at risk of a game-changing event in the appetite for U.S. dollars. If this happens, the reversal in multiple assets simultaneously will be spectacular.
Sunday, 8 November 2009
Long-dated oil soars
Long-dated oil prices have risen to near $100, in a sign that investors expect higher prices in the long-term as the recession subsides.
The furthest trading contract - the December 2017 - rose to $99.97. Prices have risen almost 10% for the month.
Positive economic data and investor flows into riskier assets have helped to boost prices amidst concern for supply issues going forward. Long-dated oil futures tend to be thin on volume however, so the prices are sensitive to large trades.
The furthest trading contract - the December 2017 - rose to $99.97. Prices have risen almost 10% for the month.
Positive economic data and investor flows into riskier assets have helped to boost prices amidst concern for supply issues going forward. Long-dated oil futures tend to be thin on volume however, so the prices are sensitive to large trades.
Oil falls on jobs data
Oil prices fell more than 2% after friday's NFP figures showed a larger than expected rise in job cuts for October, sending the unemployment rate to 10.2%, the highest since 1983.
Early trade had pushed the price above $80 but the breach of the psychological 10% barrier, sent prices below $78.
Early trade had pushed the price above $80 but the breach of the psychological 10% barrier, sent prices below $78.
Wednesday, 28 October 2009
Oil extends fall below $78
Oil continued to fall on a strengthening U.S. dollar and higher gasoline inventory figures wednesday.
The DOE reported a rise in gasoline stocks of 1.619 million barrels against expectations of a 1.1 million draw.
The USD continued it's recent gains, trading as low as 1.4747 at 12:31pm EDT.
The DOE reported a rise in gasoline stocks of 1.619 million barrels against expectations of a 1.1 million draw.
The USD continued it's recent gains, trading as low as 1.4747 at 12:31pm EDT.
Correlation update
As I stated previously on this blog, oil is among a collection of assets which have a high inverse relationship to the U.S. dollar. The recent panic lows in the U.S. dollar sent oil, gold, stocks and currencies to highs for 2009 amidst a recovery picture, which may be showing signs of stalling.
Despite the recent rise in gold, which was rocketing amidst market hype surrounding the fate of the U.S. dollar, the price action of the last few days has shown that a sustained dollar move does not bring underlying support for gold and the other correlated assets.
The anti-dollar trade was getting crowded and we may now see a brisk short-covering rally, which would lead to a further unwinding of the recent gains in oil and the other risk assets.
The recent bounce in the dollar to the 1.4750s versus the euro, have also led to a 3 day slide in global stocks and a plunge in gold from $1060/70 to 1030.
Despite the recent rise in gold, which was rocketing amidst market hype surrounding the fate of the U.S. dollar, the price action of the last few days has shown that a sustained dollar move does not bring underlying support for gold and the other correlated assets.The anti-dollar trade was getting crowded and we may now see a brisk short-covering rally, which would lead to a further unwinding of the recent gains in oil and the other risk assets.
Tuesday, 20 October 2009
Crude oil falls after new high
Oil fell back after breaching a new high for the year above $80 a barrel.
A falling U.S. dollar and strong company earnings helped to support price until weak prices data in the U.S. and europe forced a retreat.
A statement from OPEC secretary-general Abdalla El-Badri also helped to undermine the gains as he warned that prices above $80 a barrel would hamper economic growth.
A falling U.S. dollar and strong company earnings helped to support price until weak prices data in the U.S. and europe forced a retreat.
A statement from OPEC secretary-general Abdalla El-Badri also helped to undermine the gains as he warned that prices above $80 a barrel would hamper economic growth.
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