crude inventories 9 year highs

Quote from silk:

The only thing going up faster than the price of crude is the size of the inventories. Crude inventories havn't been this high since May 1998.

It would seem that higher inventories do not keep crude from going up. Maybe Crude would be $80 if not for the high inventory? The price of crude seems to move as it wishes with little correlation to anything. Inventories reported by the gvt are definitely near irrelevant it would seem.
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Always interesting when traders think that the price should do what the news would dictate. Hey, high inventories means lower prices. If only it were this easy....all any of us would have to do is subscribe to the newspaper....we wouldn't even need a chart.

Instead, markets discount the FUTURE. They use the news as the wall of worry. Thursday was a classic example of this....absolutely horrible inventory report....completely shrugged off.

So the question here is "what is the market discounting"? A few possibilities might be tighter supply down the road, increasing demand, hurricanes, weak dollar, accomodative FED policy boosting inflation, etc etc.

OldTrader
 
with these fundamentals, oil can be at $45 just as easily as $80. US supplies are high, but (without even bothering to look at data) off the cuff I could probably accurately say *world* inventory margins as a percent of total production/consumption are probably lower than past times. maybe someone wants to pull out some data and compare inventories in *days* of product versus total production and I'm sure its actually lower than any time the last 20 yrs. but maybe I'm wrong - again this is off the cuff. discussion and analysis of the data would be interesting.

regardless, i sat in 15 hours of traffic in parts of west Java yesterday, and I can tell you consumption and demand isn't going away. People even here are driving SUVs with reckless abandon.

fundamentally, unless we have a massive halt in asian demand, oil's overall trend is not going down.

but with NG so weak, I'm not buying the hurricane argument. at this point, its all politics. maybe CL short NG long is a good trade. I'm staying away from the CL short portion at the moment, though, considering NG long alone looks like a decent value here... assuming the powers at be don't want it down another $2.
 
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