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Trends in Oil Inventories: Difficult to Measure

We always get the headlines from the main sources, you know them GDP, up 3.5%, home prices up 10%. Rarely do we ever get the underlying numbers, or an honest analysis.
Today's stories on the crude inventory numbers again give the headline number with no analysis. Headline says, "Crude Rises on Decrease in Stocks". Lets take a look at the report.
1) Oil refineries are running at 80.6% of capacity. This is extremely bearish.
2) Refinery inputs were 233,000 barrels per day below last weeks average. Bearish.
3) U.S. Crude oil imports were down 764,000 barrels per day from the previous week. Bearish.
4) For the last 4 weeks imports have averaged 1.5 million barrels per day less than the same period a year ago. Bearish.
5) U.S. crude inventories are near the upper limit of the average range for this time of year. Bearish
6) Total motor gasoline inventories are above the upper limit of the average range. Bearish.
7) Distillate fuel demand is down 14.8% year over year, jet fuel demand down 3.1%.
Bearish

There is more, but you should get the picture. A decline in stocks right now is due to a demand problem, not a supply problem. All of the above statistics point directly to a decrease in demand for crude and distillates. If refineries were running at 90+% of capacity, maybe, maybe we could see a supply problem, but not now.
One other thing, the latest COT report shows approx. 227,000 money managed fund long contracts and about 24,000 short.
As the saying goes,"The market can stay irrational longer than you can stay solvent."

Petroleum Inventories: Everything Was Drawn Down

We always get the headlines from the main sources, you know them GDP, up 3.5%, home prices up 10%. Rarely do we ever get the underlying numbers, or an honest analysis.
Today's stories on the crude inventory numbers again give the headline number with no analysis. Headline says, "Crude Rises on Decrease in Stocks". Lets take a look at the report.
1) Oil refineries are running at 80.6% of capacity. This is extremely bearish.
2) Refinery inputs were 233,000 barrels per day below last weeks average. Bearish.
3) U.S. Crude oil imports were down 764,000 barrels per day from the previous week. Bearish.
4) For the last 4 weeks imports have averaged 1.5 million barrels per day less than the same period a year ago. Bearish.
5) U.S. crude inventories are near the upper limit of the average range for this time of year. Bearish
6) Total motor gasoline inventories are above the upper limit of the average range. Bearish.
7) Distillate fuel demand is down 14.8% year over year, jet fuel demand down 3.1%.
Bearish

There is more, but you should get the picture. A decline in stocks right now is due to a demand problem, not a supply problem. All of the above statistics point directly to a decrease in demand for crude and distillates. If refineries were running at 90+% of capacity, maybe, maybe we could see a supply problem, but not now.
One other thing, the latest COT report shows approx. 227,000 money managed fund long contracts and about 24,000 short.
As the saying goes,"The market can stay irrational longer than you can stay solvent."

Crude Oil Inventories Show a Sharp Decline

Today's stories on the crude inventory numbers again give the headline number with no analysis. Headline says, "Crude Rises on Decrease in Stocks". Lets take a look at the report.
1) Oil refineries are running at 80.6% of capacity. This is extremely bearish.
2) Refinery inputs were 233,000 barrels per day below last weeks average. Bearish.
3) U.S. Crude oil imports were down 764,000 barrels per day from the previous week. Bearish.
4) For the last 4 weeks imports have averaged 1.5 million barrels per day less than the same period a year ago. Bearish.
5) U.S. crude inventories are near the upper limit of the average range for this time of year. Bearish
6) Total motor gasoline inventories are above the upper limit of the average range. Bearish.
7) Distillate fuel demand is down 14.8% year over year, jet fuel demand down 3.1%.
Bearish

There is more, but you should get the picture. A decline in stocks right now is due to a demand problem, not a supply problem. All of the above statistics point directly to a decrease in demand for crude and distillates. If refineries were running at 90+% of capacity, maybe, maybe we could see a supply problem, but not now.
One other thing, the latest COT report shows approx. 227,000 money managed fund long contracts and about 24,000 short.
As the saying goes,"The market can stay irrational longer than you can stay solvent."

Oil Bubble Breaking? Barron's Outlines the Case, But the Argument is Weak

Enke makes the same arguments we've heard over and over, there is nothing new here. The bubble will pop, just like tech and housing, the mainstream media stops calling it a bubble and starts writing about why, "this time it's different"

Gold is Money - And Nothing Else

David Lentz,
Thank you for some common sense. Take an ounce of of gold to the supermarket and try to give it to the cashier to buy milk and bread. Gold is money? What an asinine statement.
If anyone wants to speculate that the price of gold will go up for whatever reason that is great, I've bought gold futures myself, but don't try to tell me it's because it will replace dollars, or euro's.

Don't believe Paulson: S&L 2.0, the Bank Failure Redux

Good write up, but we all know that when investing we need to temper macro analysis with actual market performance. Its no good to say, "fundamentally, the market should fall" when it continues to rise. The amount of money available to invest has made many a fundamental analysis moot. (See crude oil)

NAR Home Sales Report Shows Some Nasty Declines

You people that sing the supply and demand tune, don't get it. it was never supply and demand, it was and always has been affordability. The housing price increase we saw in the 70's was due to the "invention" of 2 income households, with 2 incomes you could now afford X dollars per month therefor you could buy a house for more money, and prices rose. In the mid to late 80's we saw some good economic times that rose income levels, interest rates backed off the late 70 highs and and homes became more affordable on a monthly basis, for a short time driving the rise that busted in 1989-1991. So the question is where is the next factor that will drive prices up again. Think about that. Its not immigration, immigrants can't afford homes with regular financing. Its not supply and demand, the aging population will more likely be downsizing in the next 10 years putting more homes on the market not less. Bottom line, that boom is gone . The 3 BR 1 Bath for $600,000 in L.A. will never get there again with out 1% interest rates, or counting multi families living in 1 house as household income.

Who's Really to Blame for Rising Oil?

Crossing the T. Famous last words, "This time it's different"

Who's Really to Blame for Rising Oil?

Sellers don't dictate the bid, buyers do. Finally. They should say that on the news at night instead of the ridiculous justifications they come up with one day, which are non existent the next.

Commodities: Bubble or Not?

I have a masters in Economics, and my experience with economists is that they spend too much time in offices looking at models. Very few actually take the time time to look at smaller details. How many saw a housing bubble, how many saw the tech bubble, how many predicted a soft landing? 11% say speculative bubble in commodities, that means 89% say no speculative bubble? I'll go with the 11%

Peter Hooper on the Economic Outlook

What a clown. So sick of this,"We may already be in a recession", most of us with our feet on the ground have seen recession since Nov.
As far as the tax credits increasing spending, mine is going to pay for a vacation I just took. I'll bet a high percentage of these checks will go towards paying for previous consumption and provide virtually no new stimulus. These economists need to stop plugging numbers into their precious models, and look at reality.

Commodities and the Fed: Answering the Skeptics

Speculation has almost everything to do with the recent price run up. Have you checked the volume. I have traded CL futures for about 3 years and up until about 4 months ago the highest volume in any 5 min bar on the electronic exchange was roughly 4000 to 5000 contracts. Recently that volume is now spiking to 8000 to 10000, and on 1 recent supply report volume was 16000 contracts. You want to tell me that is a coincidence? As for the increase in supply issue, too many economists get caught in models and theories and forget real life. In the futures markets the commercials are net short. They are not going to be filling their tanks at these prices when they believe the prices are inflated. I know I don't fill my tank, I purchase just what I need. Even if I'm paying $15.00 this week and $14.75 last week, I rather have the other $50.00 to use on something else rather than sitting in my tank. At some point the theories and models lose out to practicality and common sense.
There is no need for a refiner to have anymore inventory than is necessary at these prices.

Will U.S. Markets Crash Now - Or Later?

The guy is correct as far as the economics of what is happening to the stock market and purchasing power. The only reason it hasn't crashed yet is because there is such a large supply of money propping it up. Where I disagree is in this notion that gold is actually worth something. You can't purchase anything with gold and you can't carry it with you and you can't take delivery of 100 ounces of gold etc etc.. Even as a store of value, I'm sure they were singing the same tune in 1980, and then what happened? People realized you can't buy anything with 100 ounces of gold, you need a dollar.

Why New Oil Price Highs?

Your article, in my opinion is correct, but some elaboration on the affects of the interest cuts are needed. In a nutshell this economy is flooded with easy moey which has no where to go. Banks can borrow at the ridicuously low rate, which has been engineered to promote economic activity such as construction or investment in capitol and equipment. But given the current economy the money is not being used for that. Businesses recognize that consumers are tapped and therefore are not willing, and /or able to invest in new projects, or equipment. This means that the money that is coming into the market via lowered interest rates at the FED is being lent to wall street funds which use it to purchase in commodoties futures contracts, driving up the prices unrealistically. You are also correct in that as soon as the rates stop falling, the false boom will come to a screaching halt.