When we were kids we looked forward to Summer, as adults we can’t wait until vacation is over.
Let’s take a quick break from the oil markets for just one second to appreciate a milestone in the stock market.
Our friends over at the S&P 500 (CME:SPU14) futures managed to break 2000. I’m not shy to admit I was on the floor of the Chicago Merc when the SPoos broke 1000 and it was historical.
I remember all of the doubters saying this was the end of days. It was all going downhill from here and the financial markets would never be the same. Actually we're all just simple creatures. Just so happens that our simple lives are massed into the teeming millions and we like to follow oil. We all have a hard time recognizing that everything grows and with that so do prices.
When we hit a certain target we all think that there’s not a chance it can go much higher, spare double in value. It’s here though that we have to take this 2K in S&P seriously as $100 oil. Forget about the price and think about the value.
CRUDE (NYMEX:CLV14) -2.5M – Cushing is going to be what it’s going to be, but we’re not thinking about that. We’re concentrating on the fact that refiners need to pump up the volume as much as they can for two reasons. One, the upcoming maintenance season is going to be long and heavy. Two, we’re heading into the last hurrah for Summer with the Labor Day weekend travelers.
GASOLINE (NYMEX:RBV14) -1.75M – As much as I would like to think the high runs this week are going to give us a bit of a bump. I’d even think that imports are going to be higher this week too. The thing that I have a problem with is last week’s demand numbers and I think there’s going to be a pretty big adjustment this week and we might see one of the highest of the year.
DISTILLATE -1.5M – OK, maybe I was too bold when I thought that refinery runs were going to be so good. I guess good is relative when we’re talking about a refinery system that has been over 16M b/d over the past 8 weeks. What will be good is demand and there’s not a lot of getting around that. We’re heading into Fall harvest season so we might get a nice bump there from the farmland.
UTILIZATION -1.0% - Yeah, yeah. I just said good runs, but I guess 15.9M b/d is not as good as it once was.
CUSHING +1.0M – We need to stop focusing on the fact this is building, but what’s going to happen when it stops.