There is bullish news for oil prices today from the Energy Information Administration …
- Crude oil inventories rose 600,000 barrels when analysts were expecting a 2.5 million barrel build.
- Gasoline dropped by 200,000 barrels when analysts were expecting a 550,000 build. And this while refinery run rates actually rose 2.6% to 85.3% (a drop was expected there, also).
- Distillates had the only bearish news — a build of 2.4 million barrels when a drop of 900,000 barrels was expected.
Also boosting the outlook for oil — US employers cut “only” 491,000 jobs last month, when a 645,000 cut was expected.
Now, let’s look at a chart of oil … 
It sure looks like oil is trying to break out to the upside. And this is happening despite the fact that Goldman Sachs says the world may run out of oil storage capacity by June …
Rising Reserves of Unused Oil Put Strain on Storage
Record inventories of crude oil are building up around the world threatening to swamp storage space and belying optimism in the markets about an imminent economic recovery.
Goldman Sachs estimated last week that global storage capacity could be exhausted by June. Government figures in the US, the world’s biggest oil consumer, put reserves at 375m barrels, rising by 4m barrels in one week in April alone.An average of analysts’ predictions reckons on a reduction in demand of 1.5m barrels a day for 2009 over last year, while the International Energy Agency is predicting a fall of 2.5m barrels, but an estimate based purely on current economic growth figures would put the overall decline at 3m.
XX Sean’s note — of course, Goldman may be talking its book.
What are we to make of this? Speculators are piling into oil, figuring that the global economy is recovering. It’s a short-term rally — if you play it, be prepared for a quick end. But oil could run to $66 a barrel or even $71 pretty quickly.
Related Posts
- Chart of Crude Oil — Bullish! (10/14/09)
- Chart of Gold and Oil (10/05/09)
- Monday Chart Fiesta — US Dollar, Euro, Gold Versus Others (06/01/09)
- Latest Chart of Crude Oil (08/28/09)
- Updated Chart of GDX (11/03/09)
{ 0 comments… add one now }