Is the commodity rout coming to an end? Maybe not, but perhaps there is a pause. After gold fell for 10 straight sessions and with crude oil falling below $50 per barrel, there are early morning signs that perhaps enough is enough. With the Greek Parliament accepting the terms of the EU bailout the Euro Currency is showing strength against the greenback allowing those record shorts to perhaps start covering.
Crude is also trying to overcome a bearish supply report, at least based upon expectations and forgetting that last week's 4 million-barrel-plus fall. The Energy Information Administration reported that U.S. commercial crude oil inventories increased by 2.5 million barrels from the previous week. That build was not the 2 million barrel drawdown they were looking for. Still, at 463.9 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years.
Gasoline demand remains strong but with the return of Midwest refineries and their ability to pump out gas, the market did not seem to care. The EIA said that motor gasoline demand based on product supplied averaged more than 9.6 million barrels per day, up by 6.9% from the same period last year.
Total motor gasoline inventories decreased by 1.7 million barrels last week, but are in the upper half of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories increased by 0.2 million barrels last week and are in the middle of the average range for this time of year. Propane/propylene inventories rose 0.3 million barrels last week and are well above the upper limit of the average range. Total commercial petroleum inventories increased by 2.9 million barrels last week.