Sunday, January 16, 2011

Rbob Fundamentals and Stuff

Recent highs in the Rbob motivated a troll through the ether for some sort of explanation; turning up lots of interesting charts, not much in the way of concrete answers leaving speculation and a weak USD as the default cause.
First lets start with the EIA inventory's from last Wed. (I know very old news but still kinda relevant.)
 click to enlarge
Not exactly tight.

And the Crack is high, esp for this time of year, so have to imagine runs will stay high. 
                                                                321 Crack Spread


 Demand HAS picked up a bit, but in general the trend still has some catching up to do according to the following pieces out this last week; 
from the NY Times OpEd pages, Peak Travel? 
and
Adam Millard-Ball and Lee Schipper of Stanford University, ARE WE REACHING ”PEAK TRAVEL”?
TRENDS IN PASSENGER TRANSPORT IN INDUSTRIALIZED COUNTRIES


Here's a recent Dept. of Transportation chart;

Leaving us with this:

 courtesy of Reuters.

I guess they're figuring all the Fed actions will eventually produce some significant uptick in the economy and long term demand but as the following  piece on Historical Oil Shocks*  illustrates, there is a significant correlation between rapid increases in oil prices and economic recessions.










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