Down Day, Up Day, Tomorrow?

By: Matt Rosenberg / July 14, 2016

Oil prices are rebounding slightly this morning after yesterday’s big sell–off, amid the EIA data released yesterday morning and a weaker dollar responding to the Bank of England not cutting interest rates.  A recap of the EIA numbers had gasoline with a build of 1.2 million barrels and distillates with a build of 4.1 million barrels.  This bearish data sent the market down significantly despite a draw in overall U.S. crude inventories and Cushing inventories of 2.5 million barrels and 232,000 barrels respectively.  At the close yesterday, heating oil was down $0.0823 while RBOB settled down $0.0517.  In addition, the RBOB crack spread continues to be under pressure as gasoline consumption has slowed more than expected in recent months.

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Even with today’s rally, analysts are cautious, saying a downtrend could resume soon as record high inventories and slowing economic growth are still the prevalent themes in this market.  “The oil market is oversupplied, OPEC production is on the rise and we had a rather bearish weekly U.S. oil stats report,” said one London based analyst.  Other analysts agree, suggesting a bigger downward move could be in the future after three months of strength.  “The market moved up to $50 quite fast , so we might go down and see whether there is anything below $40,” stated another trader. 

Some global topics to keep an eye on:

  • Leadership changes in the U.K. after Brexit
  • Continued Fed rhetoric regarding interest rates 

As of this morning, heating oil is up approximately $0.02 while RBOB is up close to $0.03.  713set.png


Categories: Daily Market Update


Matt Rosenberg

Written by

Matt Rosenberg

As a key accounts manager, Matt helps large customers make mission-critical decisions by providing timely advice regarding market conditions.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


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