GoghGoner wrote:Brent rises above $70. It was joined to the stock market and now it is moving the opposite direction. Gold has moved along with oil. Whoever is buying up the oil is also buying up the gold -- the movements in prices are too closely matched for it not to be true. Now, why would big money be buying both and not worrying about the stock market? Oil does some really messed up things in the short term.
vtsnowedin wrote:GoghGoner wrote:Brent rises above $70. It was joined to the stock market and now it is moving the opposite direction. Gold has moved along with oil. Whoever is buying up the oil is also buying up the gold -- the movements in prices are too closely matched for it not to be true. Now, why would big money be buying both and not worrying about the stock market? Oil does some really messed up things in the short term.
A lot of money fled the stock market over the last couple of days. most of it got parked in ten year T bills, enough to drop the yield on those bills. Another fraction of that money went into gold bumping up that price a few bucks. The stock market has dropped 1100 points in two days making a lot of investors very nervous.
That oil stayed up shows that it is not hitched to the stock market and is a separate creature. For one thing it is a world market and events in the US while having a significant effect are not the whole story.
GoghGoner wrote:Brent just broke $70 for the 3rd time this year. WTI is lagging back over $5. Is this little bull run going to stick? I doubt it, I just don't feel like global demand is too strong right now. On the positive side for prices, looks Permian oil is having trouble making it out from the basin due to limited pipeline capacity and US can export oil at an unprecedented pace with some recent port modifications. The US crude inventories could keep decreasing. On the other hand, Cushing has been filling back up the last couple of weeks, if that continues that would be bearish.
ROCKMAN wrote:Goner - "On the other hand, Cushing has been filling back up the last couple of weeks, if that continues that would be bearish." Perhaps. But remember besides being the largest individual oil storage facility on the planet Cushing is also the largest oil BLENDING facility on the planet. In order to meet much of any increase demand by Gulf coast refineries more oil has to be shipped into, blended and stored at Cushing. Of course, some of the increase could be speculators but given current pricing trends that seems unlikely.
GoghGoner wrote:I have four primary REAL-TIME metrics that I use to create feelings about. Forecasts are meaningless.
ROCKMAN wrote:So why so much speculation about changes in storage volumes at Cushing? Wouldn’t changes in the total amount of oil stored in the country be more meaningful?
ROCKMAN wrote:vt - "Could it be that Cushing being the largest hub is a leading indicator and draw downs or builds there are usually followed by the rest or the facilities." My instinct is no. Each of the 5 PADDs (which cover the entire country) have not only unique regions shipping oil to its storage facilities but also different groups of refineries that are supplied by those PADDs.
Look at the distribution of the different PADDs. How would activity of PADD 1 be affected by activity in PADD 5? Even the impact of Cushing on PADD 2 is questionable. Much of Cushing PADD 2 storage ends up at Gulf Coast refineries while there are a concentration of refineries in northern PADD 2 around Illinois.
https://www.eia.gov/todayinenergy/detail.php?id=4890
vtsnowedin wrote: At any rate WTI at Cushing just passed $67 a barrel and that tells you the way the total oil market is moving today.
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