Energy prices rally after inventories fall
The Energy
Department reported a larger than expected decline in crude oil inventories last
week sending energy prices higher across the board.
The EIA
reported US commercial crude oil
inventories (excluding those in the Strategic Petroleum Reserve) fell by -6.6
million barrels from the previous week.
The latest report by the US Minerals
Management Service (click
here) showed today’s shut-in oil production is 843,725 BOPD. This shut-in
oil production is equivalent to 56.25% of the daily oil production in the Gulf
Of Mexico, which is currently approximately 1.5 million BOPD. Approximately 35%
of shut-in oil is as a result of problems with onshore infrastructure.
Today’s shut-in gas production is 3.518
BCFPD. This shut-in gas production is equivalent to 35.18% of the daily gas
production in the Gulf Of Mexico, which is currently approximately 10 BCFPD.
The combination of declining inventories
and lost production helped drive Heating Oil +4.33%, Natural Gas
+3.74%, Crude Oil +2.93% and Harbor
Unleaded Gas +2.37%.
The Commerce Department released
Retail Sales data for
August. The headline number fell more than expected while the ex-Autos number
rose more than expected. The Federal Reserve
Industrial Production report for August and the
MBA Purchase Index was also released today.
The net effect on US treasuries was to
send them lower. The US
10yr T-Note -0.21%%, 5yr T-Note -0.12% and 2yr T-Note -0.03%.
The major grain contracts all closed lower,
Wheat -0.53% and Soybeans -0.73% and Corn
-0.84%.
In the softs, Coffee +3.05%, Lumber +2.35%,
Cotton +0.40% and Frozen Orange Juice +0.90% closed higher, Cocoa
-1.59% closed lower.
The whole livestock group closed in the red.
Copper -0.89% was the only faller in the metals. Gold
+0.82%, Silver +0.57%, Palladium +0.41% and Platinum +0.44%.
Economic News
MBA Purchase Applications:
Purchase Index – Actual 513.4
Retail Sales:
Retail Sales, M/M Change – Actual -2.1% Consensus -1.4%
Retail Sales (excl. autos), M/M Change – Actual 1.0% Consensus 0.5%
Industrial Production:
Production, M/M Change – Actual 0.1% Consensus 0.2%
Capacity Utilization, M/M Change – Actual 79.8% Consensus 79.8%
EIA Petroleum Status Report:
Crude Oil Inventories -6.6 M Barrels
Gasoline Inventories +1.9 M Barrels
Ashton Dorkins