Taking a Breather

By: Matt Rosenberg / March 23, 2017

A day after digesting the Department of Energy stats and after many days and weeks of volatility the market seems to be taking a breather thus far today with all oil market indices except RBOB (down ~ $.0100) hovering somewhat flat.  As was reported in this space yesterday, the DOE stats were in-line with Tuesday afternoon's American Petroleum Institute numbers.  The consensus among both reports were builds in crude stocks with draws in both refined products.  This latest inventory report is again raising questions about compliance by OPEC nations and Russia to cut production.  As one European analyst stated, “Headwinds from rising production and compliance issues will keep the upside limited for now.”  He went on to add that risks were “skewed to the downside.”  At yesterday’s settle, crude finished down $0.0020 to settle at $48.04 while heating oil and RBOB also finished down to close at $1.4968 and $1.6019, respectively.

As has been detailed for months now, the supply tug of war between the U.S. and OPEC will continue with no apparent end in sight.  One motivating factor for Saudi Arabia to keep prices higher and supply lower is the pending public stock offering of Saudi Aramco.  In addition to higher crude prices increasing revenue for the nation, the higher pricing will also boost the valuation of Saudi Aramco when it goes public. 

Newsworthy domestic events to monitor in the coming days and weeks will of course be the possibility of further interest rate increases, the administration’s progress on tax reform and the various FBI investigations taking place.  Globally, there is Brexit as well as the question as to whether OPEC/non-OPEC producers will extend their 6-month production cut agreement.  Currently, the consensus is that the agreement will be extended.  

 

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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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