The overarching concern in this market is the growing inventory levels for crude, and that doesn't seem to be easing despite the strong refinery runs we've been having.

Phil Flynn

Categorized in : Most Read Articles

The Fed could trump the EIA, especially if they cease using the word 'patient' in line with any potential rate hike. The dollar could go gangbusters on that, and pretty much all commodities, including oil, will be impacted.

The strike news is mainly psychological in that it hasn't yet had a big impact on production, but a settlement would soothe concerns about the possibility the strike could eventually hurt output.

The ship channel opening allows crude to get to refineries and the expectation is that with margins strong, refiners will produce as much as they can.

On the face of it, this executive order should have been bullish if anything to oil, if it impedes oil moving of Venezuela in any way, but Venezuela is such a basket case that people tend to worry about so many other things concerning that country, and that's possibly what caused the market to go down.

Naturally, when prices fall that much within that short a time, you're likely to have a severe rebound as well, though speculators are possibly adding more fuel on the way up now.

The truth of the matter is that after this newest record high in crude inventories, it's probably going to be outside forces like the dollar, stock market and economic data which will determine if oil prices continue to go up or pull back.

There's no doubt that we have a combination of supplies hitting their zenith at a time when demand is weakening.

It's a Christmas flood of oil at a time when refiners and producers usually are letting inventories get lower for end-of-year tax reasons, but with this flood of supply there's no place to put it.

It's a very bearish report and plays into the mantra of supply glut and it will be interesting to see if the price can test the lows in the $53 area as the year comes to a close.