Friday, February 12, 2010

China + EIA = Lower oil - WSJ

"Market-risk assets in general are being affected by the news out of China, that it is tightening its monetary policy," said Brad Samples, analyst with Summit Energy in Louisville, Ky.

Equity markets were also down sharply as investors moved out of risky assets and headed into the safety of Treasurys and the dollar, which briefly hit a near nine-month high against the euro.

Ongoing worries about the economy are also still stemming from European debt problems, specifically the inability of European leaders to offer a firm commitment to plans for a Greek bail-out. The euro-zone also reported disappointing GDP figures, showing growth of just 0.1% in the fourth quarter, compared with 0.4% in the third quarter.

Data from the U.S. Energy Information Administration on Friday reinforced oil's move lower, said Samples. Crude stocks rose 2.42 million barrels last week, more than the 1.3-million-barrel gain analysts surveyed by Dow Jones forecast. The data was delayed from Wednesday due to snow storm-related shutdowns of government offices in Washington D.C.

http://online.wsj.com/article/BT-CO-20100212-711821.html?mod=WSJ_World_MIDDLEHeadlinesEurope

EIA reports a little changed market - Reuters

U.S. crude oil and gasoline inventories
rose more than forecast last week while distillates fell much less than
expected, showed weekly government data on Friday which analysts said
reflected lingering weak demand for refined fuels in the world's largest
energy consumer.

"You couldn't ask for a more bearish report. It speaks to the
continuing lack of demand in the U.S. market," said Brad Samples of Summit
Energy in Louisville, Kentucky.

"Total (petroleum) product demand, at just below 19 million barrels a
day, is 2 million barrels a day below the five-year average level for this
season," said Samples of Summit Energy. "Demand has stabilized, just at
very low levels."

http://uk.reuters.com/article/idUKN1222589120100212

Wednesday, February 10, 2010

Europe's periphery gets a hand - Reuters

"News that major European economies have resolved to help
Greece and possibly other peripheral economies within the euro
zone is bullish for risk assets and also the euro. This
development is also supportive for commodities and equities,
and not for the dollar," said Brad Samples commodity analyst,
at Summit Energy Services Inc, in Louisville, Kentucky.

http://www.reuters.com/article/idUSN1014763520100210

Mr Market knows - BusinessWeek

“Demand estimates are being revised upward,” said Brad Samples, a commodity analyst for Summit Energy Inc. in Louisville, Kentucky. “The market anticipated that long, long ago. So now the market is moving more in line with reality and the forecasters are moving upward to meet reality.”

http://www.businessweek.com/news/2010-02-10/oil-fluctuates-as-opec-boosts-outlook-u-s-supplies-increase.html

Thursday, February 4, 2010

Monster sell-off in risk assets - WSJ

The heavy losses in oil were accompanied by drops in equities and other commodity markets in a widespread exit of investors from risky assets on concerns about the economy.

"Today is an across the board movement away from risk and a flight to quality," said Brad Samples, analyst with Summit Energy in Louisville, Ky. The fall is "not just specific to oil."

The catalyst for the initial leg down was an unexpected rise in the number of U.S. workers filing new claims for jobless benefits last week. The Labor Department reported a rise in claims of 8,000 to 480,000 for the week ended Jan. 30.

"The initial jobs claims spooked the markets in anticipation of tomorrow (Friday's) jobs figure," said Samples.

The more widely anticipated U.S. non-farm payrolls for January will be released Friday morning. Investors will be closely watching for any changes in the jobless rate, with economists forecasting it at 10.1%.

Meanwhile, worries over the level of debt in European countries rallied the dollar to an eight-month high against the euro, contributing to a sharp decline in oil prices. Dollar-denominated oil tends to fall on a stronger greenback as it makes the commodity more expensive to other currency holders.

Fears mounted that Greece, Portugal and Spain may find it hard to bring their budgets under control--jeopardizing a fragile euro-zone economic recovery--and that this could potentially spread to other deficit-heavy economies.

Noting the longer-term run-up in the oil market since March 2009, Samples said oil prices have "over-anticipated economic recovery to some degree". He added "economic data is getting better but the pace of improvement is not very reassuring".

http://online.wsj.com/article/BT-CO-20100204-715505.html?mod=WSJ_World_MIDDLEHeadlinesEurope

Monday, February 1, 2010

PCE, Nigeria, and Crude - Bloomberg

“Consumer spending is really influential because it accounts for 70 percent of the economy,” said Brad Samples, a commodity analyst for Summit Energy Inc. in Louisville, Kentucky. “The equity markets, commodities and the Fed are all looking for signs of sustained growth. Increased consumer spending provides some hope.”

Nigeria

Shell’s Nigerian unit said it halted some flow stations in the country’s southern oil region after sabotage caused a pipeline leak. The damage was detected Jan. 30, the same day the Movement for the Emancipation of the Niger Delta, a militant group, said it was ending an “indefinite cease-fire.”

“Nigeria has been quiet for six months,” Samples said. “We were looking at Nigeria as a source of new supply that would mitigate increasing demand this year. That view could be out the window now.”

www.bloomberg.com/apps/news?pid=20601082&sid=aq10MkMkQRzU