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OIL was under pressure yesterday after the energy report showed that inventories were up. Based on Jim Jelter’s report in Market watch yesterday
“Energy Information Administration reported a hefty 6.9 million-barrel jump last week in U.S. crude supplies to 349.3 million, or 3.2% above year-ago levels. Gasoline inventories, which had fallen far behind their usual levels for this time of year, rose 1.8 million barrels to 203.3 million. The rise in supplies far outpaced expectations in the energy market. Mid-June typically marks a turning point, when the demands of the summer driving season start to eat into fuel inventories. Reaction to the data was swift, knocking 91 cents off July crude futures to $68.19 a barrel. Gasoline futures fell 0.3% to $2.2281 a gallon”. In addition to concerns over swelling crude supplies, energy equities were hit by several dour research notes, including a broad Credit Suisse downgrade of integrated oil companies to benchmark from overweight. “To be overweight oil appears to be the consensus view … and the sector is overbought in our view,” the broker wrote.
Inventory rise of 3.2%? I am not sure if this is really a long term bearish sign? Or bearish at all. Is it a short-term knee jerk reaction or a sell-off trigger? Do you think so? Let me keep it straight without going into too much of numbers-
Was there any great Oil well discovery in past few weeks?
Was there any discovery on superb energy renewable method?
Or have we made excellent progress on converting ethanol as equivalent to oil and made processing so cheap that oil is expensive now?
Oh maybe China and India has stopped consuming Oil? Is it? Maybe they have switched overnight to nuclear energy? Really? At least I am not aware of.
So What has changed? Perspective. I am with bulls for long term. I find no solid reason for a bearish outlook. But that’s me and I may be wrong. As we all know, Oil is slippery, so walk carefullly, trade carefully.
Profitable trading, OptionPundit