The EIA reported crude oil fell by only 900,000 barres last week. That was a shocking contrast to the 5.5-million-barrel drop that we saw in the API report. What was more interesting is that in all of the most watched areas of crude supply, we saw a sizable drop in supply.
The front month natural gas contract hit a new high for the year just as the summer solstice was about to begin. Record high temperatures in southern California and the American southwest are already raising fears about natural gas shortages. California is warning about emergency measures and talking about rolling blackouts--and we have not even gotten through the first full day of summer!
Crude prices fell on Monday, weighed down by gloomy economic prospects in Europe and Asia and a related strengthening in the U.S. dollar, which makes fuel imports for countries using other currencies more expensive.
Crude oil prices are selling off on fear, dread, fright, alarm, panic, terror, trepidation and painful agitation in the presence or anticipation of danger that turmoil in the global economy may crush demand just as there are some signs that U.S. oil rig counts may continue to rise.
Crude oil prices are struggling as global markets get fearful about the future causing safe haven buying in Treasuries and the U.S. dollar. The massive comeback in crude oil is put on hold as traders fear everything from a Brexit vote to the Fed as well as dire predictions about the economy from none other than George Soros and “Bond King” Bill Gross.
Crude oil futures surged to new highs on the year after a drop in U.S. oil supply and a huge spike in trading volume. The crude oil price overlooked the fact that U.S. oil production actually increased for the first time in 18 weeks maybe because it was up 100,000 barrels a day and instead focused on the fact that oil supplies fell by a more than expected 3.22 million barrels.
Crude oil prices are higher ahead of this morning’s Energy Information Administration oil inventory report after a slightly larger than expected draw in total crude oil stocks reported by the American Petroleum Institute’s late yesterday afternoon. In addition the market remains concerned over the ongoing unscheduled shut-ins in supply from places like Nigeria while oil demand in China increased once again. Overall, the oil market sentiment remains biased to the upside.
Crude oil prices closed at the highest level since last July and could be getting ready for a breakout run. The oil market, which just a few months ago was given up for dead, is now surging on global supply concerns, surging demand and Federal Chairperson Janet Yellen.
There are more signs that the fundamentals are changing for crude oil and natural gas. Not only has Saudi Arabia raised prices for its oil in a sign that they have confidence they can maintain market share, but natural gas had its best move all year last week.