If the quote "the trend is your friend" isn't the true narrative of the energy complex over the past 20 trading days, I'm not sure what other phrase may be used to depict exactly what we have witnessed. WTI crude for August delivery has had a 20.15% rally from its lows on June 12th to its highs on July 11th with only seven opportunities to buy lower on the day and watch it rally over the following days.
Middle East conflict. As daily energy market participants, we cannot help but think of those three words as just part of the everyday life within the oil industry. It would not be a trading day without the digestion of what current events are happening in the Middle East, what OPEC producers are involved, and whether it will disrupt production in the near term or long term. With recent headlines of beefing up our military presence in the Middle East, specifically near Iran, and twitter threats of a U.S. conflict with Iran would be the “official end” of Iran from our administration and “never threaten an Iranian”, from the Iranian Foreign Minister Zarif, we look at the correlation of mid-east conflicts and the price of WTI crude. Below is a list of most recent Middle East conflicts and the subsequent yearly open, low, high, and settlement of WTI crude oil:
As, arguably, the most anticipated month of the year for both cross-country driving enthusiasts and beach lounging sun bathers, the month of May, approaches, we must check our pocket books and weigh the cost analysis of driving the extra miles to visit the largest ball of twine or not.
As daily energy sector market participants, we are often reminded how much drama, information or data needs to be vetted and digested on any given day. Unlike the set of “Oakdale, Illinois” in “As the World Turns” (1956 – 2010) where melodrama was the main theme and “the bleakness of winter, the promise of spring, the fullness of summer, and the harvest of autumn” were everyday life, the world of energy is a lot less predictable. Below you will find just some of the current headlines, event risks and technical levels that have to be digested just in one day:
Oil markets indices are up this morning following a day in which RBOB, heating oil and crude all finished lower. Yesterday’s settles had crude down $0.31 / barrel to settle at $52.41 while the refined products RBOB and heating oil also finished lower by $0.0272 / gallon and $0.0163 / gallon to close at $1.4192 / gallon and $1.8922 / gallon respectively. This morning the market has taken back those losses as bullish headlines are dominating the news. To summarize: