When crude oil started its ignominious drop in beginning of July, it was mainly because of concerns of a Greek exit from the Eurozone and a Greek default. When Greece, instead of taking a bailout, decided to put the decision to the vote, it created chaos in their economy as well as across the Eurozone. Today, as the Greece parliament has voted to accept the bailout that they seemed to previously reject, we are getting data on just how many problems Greece's bailout tantrum cost the Eurozone economies.
According to the latest data, the Euro-area economic growth is 0.3%, just missing the 0.4% expectations and showing clear evidence that Greece's government helped drag down the growth of the partners that were trying to help bail them out. What this shows is that Greece's government helped bring down growth in the zone that was showing so much promise, which right before the Greek tragedy had shown Eurozzone manufacturing at a 14-year high.
It wasn't so much exports that slowed, but investment too, and that was because Greece's little side show zapped confidence. The European central bankers are concerned and "disappointed" that the damage done by Greece may only be solved with more quantitative easing.
Retail gas prices have gone up 6 cents a gallon nationwide, reflecting the sharply spiking prices across the Mid-West due to the fall-out from the problems at the BP Whiting Indiana refinery Crude Distillation Unit (CDU). This is a pre-refining unit that gets heavy crude ready to run through the final process. In the Chicago area prices have spiked in some areas by 80 cents a gallon in just 2 days. The Chicago wholesale market is leveling off though and there are reports that BP is taking steps to soften the blow. BP reportedly is buying feedstock that they can run through its refinery and produce some gas and distillate to make up for some of the loss.
China is showing that they don't want the yuan to fall too far and has been intervening in the market to support its devalued currency. Oil is also seeing weakness from the Eurozone GDP. Still, the number to watch is still $42 a barrel. If we close above it we have a shot for a bottom, a drop in rig counts or growing speculation that the Fed can't tighten this year with rising global deflationary pressures, and the possibility of more Eurozone quantitative easing may be a case for shorts to take profits.
Natural gas saw a bearish report, but strong demand is keeping this market hanging. The Energy Information Administration said that working gas in storage was 2,977 Bcf as of Friday, Aug. 7, 2015, according to EIA estimates. This represents a net increase of 65 Bcf from the previous week. Stocks were 521 Bcf higher than last year at this time and 81 Bcf above the 5-year average of 2,896 Bcf. In the East Region, stocks were 61 Bcf below the 5-year average following net injections of 53 Bcf. Stocks in the Producing Region were 124 Bcf above the 5-year average of 975 Bcf after a net injection of 7 Bcf. Stocks in the West Region were 17 Bcf above the 5-year average after a net addition of 5 Bcf. At 2,977 Bcf, total working gas is within the 5-year historical range.