It’s "sunshine on the shoulder" season as U.S. refineries slow runs to 87.8% of capacity, running just 15.9 million barrels, the lowest level of the year as seasonal maintenance flips into high gear. The trade seemed disappointed that the overall 3-million-barrel build in crude oil supply was higher than expected. That is what should you expect when seasonal maintenance is happening.
Crude oil prices are on the rise as Saudi Arabia pledges to reduce oil exports and the fact that U.S. shale pains are becoming more obvious to the market. Halliburton is warning that the U.S. oil rig count is about to plateau or "peak shale,” which we predicted.
As we reported the possibility on Friday of last week (see “Gold on shaky footing as dollar surges to highest since 2003” for more), gold did indeed fall further lower this week. The rising dollar, yields and United States equity prices all weighed on the appeal of the buck-denominated, noninterest-bearing and perceived safe-haven precious metal.
It is now National pork month. This month of pork features at the retail counter was started to help each the strain from the heavy supply portion of the year. The effect on this year's pork pricing won't be easy to calculate. We are coming into a very well supplied meat environment.
Fundamentally, crude oil supplies are at record levels here in the United States and globally, yet prices climbed this past week on news of rig and supply counts at places like the Cushing and Baker Hughes facilities.