Crude Oil is off a little bit today, ending a four day rally of prices. The reason for the drop is said to be anticipated inventory builds, which should be announced tomorrow. It’s somewhat comical, as I have a prediction; inventories will build next week, too…the way they have the last six or so weeks. Tis the season.
Here is a quote from the article: “The idea that we will have a sixth straight week of inventory build in the U.S. is weighing on the market,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford,Connecticut. “As long as we continue to see weakening fundamentals, the market will have a tough time to pick its head up.”
Ahh, fundamentals. I so enjoy when they come into play and we can remove emotion from the analysis curve.
The article goes on to discuss the increasing output from shale formations as the lead dog, but refineries haven’t been chewing much as there has been some maintenance across the board. That should change soon but we are beyond.
Tomorrow will be an interesting day. The EIA’s will be coming out at 10:30a eastern, 9:30 central. I am expecting a draw of some significance. Then you’ll have crude on the other side showing another likely build of significance. Propane has held firm and even risen since last week’s bearish crude report and I’d hazard to guess it will do the same tomorrow. Right now, it has a mind of its own.