[DAILY PETROSPECTIVE] June 2, 2010

Early Evening Market Review for Wednesday

Oil prices advanced on Wednesday as traders boosted
cvommodities quotes on positive data reports on US homes and
autos, generally considered the two “biggest-ticket” items
purchased by consumers.
The National Association of Realtors reported a 6% jump in its
April index of pending hom,e sales. This was more than the 5%
generally expected by analysts and realtors. And, American auto
sales recorded strong year-on-year sales figures, with Ford
reporting a 22% increase in sales in May, while General Motors
reported an increase of 32% in May sales.
Page | 1 Research: 203.801.0771
Sales: 203.504.2786

www.cameronhanover.com Powered by FMX | Connect

 [DAILY PETROSPECTIVE] June 2, 2010

These specifically American numbers helped US oil prices, although traders were quick to remind
themselves that oil is a global commodity and weakness in one place needs to be made up or compensated for
by strength somewhere else. And Europe, or the “euro-zone” as it is being called these days, is seen as being
an anchor on the economic recovery as well as on oil prices.
At the end of yesterday’s trading, the positive economic factors had been seen as being positive enough to
generate a rally of more than a dollar in crude oil prices (we apologize, but the PM report plucks “closing”
prices early, rather than the “settlement” prices released later in the day and used in the morning Daily
Hedger). The DJIA was up a very strong 225.52 points, to 10,249.54, by its final bell, but the gains were posted
in a fairly steady strem throughout
Wednesday’s session, and then DOE Expectations
enjoyed another burst at the end. Category Dow Jones Bloomberg Reuters
The buying we have seen recently Crude Oil up 0.200 unchanged dn 0.100 mln bbls
in the oil markets is different from Distillate dn 0.100 up 0.200 up 0.100
the buying we had throughout March Gasoline dn 0.700 dn 0.500 dn 0.500
and April. That early second-quarter Utilization up 0.1% up 0.3% up 0.2%
buying came from index funds, we
believe, from large investors who allowed money managers to place their money into oil futures as a long-term
investment. These investors typically bought and held for a long time. The investor buying we are seeing now
is much shorter-term, and it tends to view oil futures more as a composite animal that has economic inputs –
rather than as an investment that one can buy and hold in a “knee-jerk” response to higher equities or a
weaker US dollar. The fundamentals also seem to be getting more play here, and investors seem to be slightly
more aware of their existence. Of course, all of this is in flux right now.
Tonight’s API report showed a draw of 1.418 million
barrels in crude oil stocks, a build of 0.852 million bbls in
API Report
Crude Stocks dn 1.418 mln bbls distillate stocks and a drawdown of 0.962 million barrels in
Distillate up 0.852 gasoline inventories. Refineries increased utilization to
Gasoline dn 0.962 86.6%, while they cut imports by 719,000 bpd to 8.702
Utilization up 0.7% to 86.6% million bpd, which is very low for this time of year.
Crude Imports dn 0.719 mln to 8.702 mln Im[plied distillate demand was very good for late May at
bpd 4.422 million bpd, while implied gasoline demand was
unexceptional at 9.376 million bpd.
Tomorrow’s DOE report could be the next big source of movement in this market.
Crude Oil Daily Technical Chart

Page | 2 Research: 203.801.0771

Sales: 203.504.2786

www.cameronhanover.com Powered by FMX | Connect