Phil Flynn: I Have a Yen For Oil

Say goodbye to the Euro and hello to the Japanese yen. China may be raising reserve requirements to slow demand but today it is strong economic data out of Japan that seems to be giving oil a bit of a lift. Last week oil shuttered when China increased reserves on banks for a second time in a month. Yet that seems to be a bit of a distant memory this morning after strong data out of Japan.

Bloomberg news reported that crude oil rose after gains in Asian equities and growth in Japan’s economy increased confidence that a global economic recovery will lead to higher fuel demand. Better than expected demand expectations for oil came from the fact that Japan, the world’s third-biggest oil consuming country, yesterday reported 4.6 percent growth in gross domestic product for the three months ended Dec. 31, surpassing the 3.5 percent median estimate of economists surveyed by Bloomberg.

This strong data saved oil from its bearish fate as the carry traders may look to the yen as an alternative currency to play with. The situation in Europe is looking even more uncertain as the debt problems surrounding Portugal, Ireland, Italy and Greece and that makes the yen a more attractive alternative.

Oil has a lot to prove with seasonal demand peaking as we enter the long slow march out of winter. The Energy Information Agency reported that the U.S. average price for regular gasoline fell for the fourth week in a row, dropping less than a penny to reach $2.65 per gallon, which was still $0.73 above last year. On the East Coast the price decreased almost two cents to $2.67 per gallon.

The Midwest average increased by over a penny to $2.57 per gallon, and Rocky Mountain prices rose by less than half a cent to $2.62 per gallon. Gulf Coast average prices fell almost 3 cents to $2.52 per gallon and remained the lowest regional prices in the Nation. The West Coast average dropped close to 2 cents to $2.90 per gallon and the price in California decreased over a penny to $2.96 per gallon.....Read the entire article.


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Big Draw in Gas Supply Sends Energy Prices Jumping

Refineries that make gasoline and other fuels swiftly cut back on production last week, the government reported Thursday, sending energy prices jumping across the board. Energy markets had largely brushed off a winter weather forecast this week for major winter storms in the East and icy, cold conditions even between Atlanta and Dallas.

The Energy Information Administration, however, reported Thursday that gasoline in storage fell by more than 5 million barrels at a time when most energy experts expected supplies to grow yet again. Refiners have been idling facilities because of a lack of demand at the same time that others have been shut down for routine maintenance. Earlier Thursday, the dollar hit a 52 week low and the surprise report on gasoline may have led some people to believe supplies are growing tight, said oil analyst Tom Kloza said.

"The ignition switch for a rally got hit twice today," Kloza said. For consumers, that may mean a slight drift upward in pump prices but not much, experts believe.
Crude and gasoline prices have remained relatively stable for months with no clear signs of an economic rebound. Prices began to rise late last week when Alcoa, which kicks off the U.S. earning season, reported that it had returned to profitability after three straight quarterly losses.....read the entire article

What Glut? Oops, Maybe There Is A Glut After All

For weeks the talk in the investment world and the energy business was what would happen when the glut of natural gas rendered winter storage no longer an option. The debate focused on what would happen to the surge in natural gas production if we completely filled the nation’s available storage capacity before the start of the heating season. How would producers handle involuntary well shut ins? What would happen to the price of natural gas would it be like some periods in recent memory in which Rocky Mountain gas sold for pennies?

How would producers handle involuntary well shut-ins?

But then an amazing thing happened. The Energy Information Administration’s (EIA) weekly gas storage report for the week ending September 4th came out showing that producers had injected only 69 billion cubic feet (Bcf). The gas futures market took off. Gas injection volumes for the week were below the average expected by analysts and traders on Wall Street.....Read the entire story

Analyst: Crude Oil Market Looking Tired Here

"Oil Fluctuates on Signals Recession Easing, Fuel Supplies Gain"
Crude oil fluctuated in New York after reports signaled that the U.S. recession is easing and as fuel inventories increased. Oil climbed from the day’s lows after manufacturing in the Philadelphia region contracted in June at the slowest pace in nine months. U.S. supplies of gasoline and distillate fuel, a category that includes diesel and heating oil, rose last week, the Energy Department said yesterday. “The market is looking a bit tired here,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “The fundamentals are really poor, with poor demand and excess supply. The recent rally has priced in quite a lot of good news that hasn’t had any impact on the energy.....Complete Story