evening wrap, august 5
Trading NY was a mixed bag today. The Dow and S&P made new all time highs early in the session and faded. Spiking platinum, gold and silver have more than matched the animal spirits of select equities not withstanding a soggy NDX. Copper missed an ATH by 2 ticks… For the bears, oil had a respectable dump and the yen has actually been a disappointment. I must say instead of validating the inflation and rate hike narratives the markets are mocking them.
in oil markets
EIA/ DOE petroleum stats netted out to an 800k draw for major fluids. Total commercial petroleum inventories, excluding SPR rose 2 million folowing a 20 million + build in the previous 2 weeks. Cushing inventories rose 2.4 million to 21 million so there is that for hair pullers.
The velocity of national refinery throughput remains red hot, at 96.5 % capacity usilization and 17. 2 mm bpd runs. Exports of crude and products have moderated in a more competitive foreign market and domestic ‘all-products-supplied’ was 20+ mm bpd where it has been roughly for the last 20 years.
For many weeks DOE data has consistently implied a lean super profitable supremely well managed industry; well balanced upstream and downstream inventory management, maximizing an historic period of record margins.
I think there be many who will look back with teary eyes when peace comes to these wars, not for loss of lives and treasue but for dreamy refining margins and the absence of a war premium that made it possible.
This chart of WTI illustrates how easily risk on longs were stampeded into 750 million barrels of ICE and NYMEX futures and how the exodus of 50 million barrels per week added more than enough paper supply to fill the hole left by closing the SOH. As inventories drew down so did the paper market and now …at the bottom … there is once again … a very bitter taste for risk in oil.
Technically oil grows more balanced every day. OI could keep falling as physical vols and demand destruction normalize.
in the stock markets
