Quote of the Day
To me, if life boils down to one thing, it's movement. To live is to keep moving.
The oil complex is pushing higher for the second session in a row after starting the week out on the defensive. The sell-off in the global risk asset markets started to ease yesterday pushing oil fundamentals back into the main price directional driver’s seat. Last night’s API oil inventory report was mildly bullish while the cold weather lingering over major parts of the US is also proving upside price support as demand for heating fuels continues to be strong.
The latest NOAA six- to 10-day and eight- to 14-day forecasts are both still supportive for an above normal level of heating fuels demand over the next several weeks across the eastern half of the US. Beyond the middle of February some of the private weather services are suggesting a return to more normal temperatures… but as we have seen for most of this winter so far it is still too early to project the foreword period much beyond two weeks or so.
As I have been suggesting the Brent/WTI spread is trading in single digits for the sixth trading session in row with the current level very near the $8/bbl technical support zone as of this writing. Last night the API reported a 1.6 million barrel draw in Cushing crude oil stocks as the Keystone Gulf Coast Pipeline continues to empty un-needed crude oil out of the Cushing area which is bearish for the spread. The flow rate on the Keystone line is only going higher and thus the ability to move even more oil out of the Cushing area will increase going forward.