Oil prices are making a rebound after what was close to, but not quite, a $10 correction. Oil has fallen close to 7% since last Friday.
It seems that after catching the marketplace by surprise with the veracity of the sell-off, the focus is now turning back to bailouts and blow outs. A report by the Financial Times that the terms of a Spanish bailout have been agreed to and that they could be asking for it over the weekend, is giving the euro a boost and putting the risk trade back on. Bloomberg News says that, "European stocks pared their gains, leaving the benchmark index little changed, as futures and options contracts on equity indexes expire in a process known as quadruple witching. U.S. index futures and Asian shares rose."
Oil also is being led higher by gasoline after reports of an explosion in some storage tanks at a Venezuelan refinery. Surprisingly we have seen a late surge in US gasoline demand at a time when supply has been tightening. Gasoline stocks fell by 1.41 million barrels, falling 8.3% below year ago supply. That comes as gasoline demand rose 3.1 percent last week, according to data from MasterCard Inc. as consumers consumed 8.76 million barrels a day of gasoline up from 8.5 million the prior week. Refiners will need to kick it up a bit.
Oil also got a boost from some seasonal factors as well. Despite the Saudi pledge to flood the market with oil, OPEC exports should fall. Dow Jones reports that oil shipments from the Organization of Petroleum Exporting Countries are to decrease by 170,000 barrels a day in the four weeks ending Oct. 6, according to U.K.-based tanker tracker Oil Movements.
Natural gas held up despite a bearish 67bcf injection. The reason may be the weather. Above-normal temperatures are being predicted across most of the US! Endless Sumer! They should help gasoline demand as well.