So far for the week the spot WI contract is still lower by about $0.65/bbl while the spot Brent contract is lower by about $0.50/bbl. The market continues to trade in a choppy sideways pattern with the bias slightly to the downside. Today’s EIA inventory report will likely be a market mover if the data is in sync with bearish API data.
Big pain in the oil patch as Chesapeake Energy cuts 15% of its total workforce amounting to 740 high paying energy jobs. The company, which has already cut its capital spending by more than 40% is retrenching even more to stay what CEO Doug Lawler will be an "enduring enterprise."
A large draw in total U.S. crude oil stocks reported by the API late yesterday has resulted in a light round of short covering in a market that remains oversold. As of this morning the crude oil market is still in positive territory but well off of the overnight highs hit after the API data release as the industry awaits the more widely followed EIA oil inventory snapshot.
More signs of a slowdown in the Chinese economy may not be enough to overcome a potential slowdown in U.S. oil output. The preliminary Caixin/Markit China Manufacturing Purchasing Managers' Index fell to 47.0 in September, its lowest since March 2009 yet only down slightly from last month. The weakness was well telegraphed by other readings but how well telegraphed was the drop in U.S. oil inventories?
The day after crude oil prices rose almost 5% the dogma of the dollar versus oil inverse relationship has come to a screeching halt ahead of the most exciting FOMC meetings in a decade. As the Fed moves closer to raising interest rates and getting closer to a normalization of interest rate policy the correlation between the dollar and oil is breaking down.
U.S. crude oil production may be falling faster than many had thought and we are seeing signs of that in Cushing, Okla. Cushing is the Nymex delivery point and a storage facility that if you listened to the Ultra Bears was supposed to be overflowing with oil. Instead the opposite is happening as supply there have fallen five out of the last seven weeks and is slated to fall once again.
http://admin.futuresmag.com/admin/structure/nodequeueHedge funds are not listening to crazy bearish crude oil price predictions like Goldman's $20 a barrel call and instead are amassing its biggest net long position since last April. Oil fund managers are not betting on $20 a barrel oil this week because they increased their net-long position by 16,855 contracts to 132,857 futures and options in the week ending Sept. 8, according to the CFTC commitment of traders report.