Crude inventories at 5020K from 2408K last report – is it slack in demand or excess supply?
Sam Adelton
Oct. 18, 2006

The crude inventory report was very interesting. The Crude inventories came at 5020K from 2408K last reports. The oil market along with other energy derivatives went down.

The oil market in the long run is headed for a collapse. But with this bearish report, there may be some attempt to build a base and rally towards mid sixties.

The biggest question in trader’s mind is if this extra inventory is due to slack in demand or extra supply.

The reasons for extra inventory are three. First, US stopped filling up its strategic reserves in the summer to help the crude price come down. Now the inventory data is showing that. Second, the hedge funds that were holding enormous amounts of crude futures for speculation finally got busted. Those contracts are out for trading. The producers who wrote their contacts are getting ready for deliveries. The oil companies finally are getting their inventories out. The third reason is that the Russian and Canadian output has surpassed marker expectations.

The economy according to all other data is growing healthily though under the general theme of stagflation. The demand has dampened a bit because of mild weather. But overall the demand is not the issue. It is supply that has caused the extra inventrory.

In coming days however, the Indian and Chinese demand will fall. That spell more trouble for the crude and its derivative markets.

Crude inventories at 5020K from 2408K last report – is it slack in demand or excess supply?
Sam Adelton
The crude inventory report was very interesting. The Crude inventories came at 5020K from 2408K last reports. The oil market along with other energy derivatives went down.
READ MORE>>

The lower consumer price index with steady increase in core CPI will signify that the economy is quietly tilting towards recession
Peter Oberois
The data is due at 8.30 AM. The market expects a 0.3% drop compared to a previous month’s 0.2% increase. The core CPI excluding energy and food should actually rise 0.2%. This translates into a scenario where the economy is going south.
READ MORE>>

Lowered mortgage rates boosted the building permits – it can be a real surprise
Joesph Weinman
The building permit data closely inversely correlates (nonlinear) the acceleration of mortgage rate rise or fall over time with a little lag.
READ MORE>>

Housing starts will surprise and manifest strength in US economy
Kirsten Riegel
Demand for residential units is a function of demographic growth. The prices are a function of demand and partly on supply.
READ MORE>>

Asian stocks weak on US growth prospects – a recession in America can devastate them
Karen Robson
The stock markets all across Asia are weak today. The prospect lower economic growth is pulling these stocks down. The prospect of lower export is hurting the Toyota, Sony and others.
READ MORE>>

Bank of Japan denies rumor about its comment on Yen - the currency should consolidate for many months now
Gloria Howard
Yen is bullish for the long term but a sidewise movement is evident as Bank of Japan waits and watch carry trades.
READ MORE>>

MORE ARTICLES >>