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Sat, 22nd July 2017

Anirudh Sethi Report

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Archives of “July 6, 2017” Day

US crude oil inventories -6299K vs -2000K est

Big draw down on crude oil inventories

The crude oil inventories had a big draw down of -6299 vs -2000K est.
The big miss has crude oil moving higher. The price was trading at $45.75 before the report. The price is trading at $46.30 currently.
In other breakdowns:
  • Gasoline inventories had a draw down of -3669K vs -1800K estimate
  • Cushing inventories had a draw down of -1334K vs -297K last week.
  • Distillates had a draw down of -1850K vs 500K estimate.
Overall, the fall in inventories is a welcome sign for producers and shows the summer holiday’s is leading to increased demand.
The price of crude has risen on the report.  It trades above the 100 hour MA at $46.21. That will now be eyed as close support.

European Indices down but rebound off lows

Major indices lower

The major European indices are ending the session lower.
  • The German Dax down -0.6%.
  • France CAC down -0.6%
  • UK FTSE down -0.4%
  • Spain’s Ibex down -0.2%
  • Portugal’s PSI20 down -0.66%
  • The Italian FTSE MIB index bucked the trend and was up 0.70%.
The 10 year yields in Europe rose sharply as the ECB minutes showed that some officials are looking toward tapering.
  • Germany 0.570% up 10 bp
  • France 0.929%, up 11.2 bp
  • Italy 2.276% up 11.7 bp
  • UK 1.325%, up 6.5 bp
  • Spain 1.683%, up 11.2 bp

 

Russian oil minister: No need for immediate extra steps

Novak spoke with Reuters

Yesterday oil fell after reports that Russia wasn’t interested in further cuts. Novak is now basically confirming that. He said the pact with OPEC is working and that there is no immediate need for extra steps.

He put the onus on OPEC to do more if Nigerian and Libyan production rose.

On prices he said $50-$60 per barrel is ‘fair’.

 

WTI Bounces On Biggest Crude Draw Since 2016

Having broken its win-streak with the biggest drop in 4 weeks today following Russia comments, crude prices hovered around $45 as API reported a massive 5.8mm barrel crude draw (most since 2016) and 5.7mm gasoline draw (most in 4 months).

API

  • Crude -5.764mm (-2.5mm exp)
  • Cushing -1.4mm
  • Gasoline -5.7mm
  • Distillates +375k
 After last week’s product draws (and small crude build), we suspect the effects of tropical depression Cindy may be impacting the dataas the draws are very significantly away from expectations…

Russia “pretty much threw cold water” on rumors of additional cuts, Bob Yawger, director of the futures division at Mizuho Securities USA in New York…

Prices dipped after the API-reported, running stops, an then ripped back higher…

Overnight US Market :Dow closed -1 points.Nasdaq up 41 points.

Nasdaq stocks lead the way.

The US major stock indices are ending the day with mixed results.
  • The Dow is the dog, as it ends near unchanged levels (down -1.1 point or -0.01%.
  • The S&P is ending the day with gains of 3.53 points or +0.15%
  • The Nasdaq index was the big winner rising by 40.79 points or 0.67%.

Although the major indices ended with mixed results, there were some individual stocks that got hammered

  • Tesla’s production numbers were less than expectations and that prompted Goldman to cut their year end estimate from $190 to $180. That is going out on a limb with the stock trading at $327 at the close. That price is down $25 or -7.24% on the day.  Do you buy some out of the money puts in case they are right?  $180 is still a long way away….
  • The auto parts stores were also hammered after O’Reilly Auto Parts pre-announced negatively. The stock fell -18.89% or -41.64 to $178.77.  Autozone fell close to -10% on the day and Advanced Auto parts fell by -11.15%.  UGLY day for that sector.