Which of the following Phils could influence the markets today? Dr. Phil? Phil Mickelson? Phil Collins? Phil Knight? Phil Jackson? Phil Esposito? None of the above. Punxsutawney Phil, nearly 100 miles north of our main office here in Belle Vernon, PA, could be the culprit. The timid little vermin did not see his shadow this morning and would you look at that, heating oil is dropping $.03 cents as of 11:30 AM ET. If Phil saw his shadow that would have indicated six more weeks of winter, but would that have strengthened the market? We will never know. So this leaves me with one question: Do you believe that the shadow (or lack thereof) of a groundhog in Punxsutawney, PA could influence the oil market? Take a second to think about what other unexpected events have swung the market in different directions in the past.
Along with heating oil, gas and crude are falling as of mid-day as well. Gasoline is down $.0550 and crude is down $1.06, approaching $30/bbl. Judging by the noisy bullish sentiment the market had last week, it seems that crude is missing the $20s like a 30-some year old misses being in their 20s. On a bearish note, OPIS has reported that OPEC output jumped to around 33 million b/d, its highest in years. The sharp increase is due to oil exports from top OPEC Gulf member Iran for the first time after years of sanctions, and sharp increases from others members, including Indonesia, Nigeria and Kuwait. Overall, U.S. crude oil inventories continue to approach the record-breaking 500 million bbl level, coming in at 494.9 million bbls for the week ending Jan. 22, according to the U.S. Energy Information Administration. This afternoon, the American Petroleum Institute will release its latest data, which is expected to show another build.
- EIA data will be released tomorrow morning and one thing to focus on is gasoline demand. With drivers off of the road because of record-breaking snowfalls along the East Coast last week, the gasoline demand will likely be disappointing.
- BP reports its worst annual loss ($6.48 B) in over 20 years, cuts more jobs.
- PBF Energy seeks to restore “reduced” Delaware refinery ops; confirms coker work. This will be a return to a 212,000 barrel-a-day operation after the refinery had a power outage more than a week ago.