NYMEX Crude Oil futures contract made a new low of $86.05 yesterday

The NYMEX Crude Oil futures contract made a new low of $86.05 yesterday, but followed stocks up to close at $88.95. Overnight it went further to $89.82, and is trading at $89.49 at 10:20 am GMT. This is something like a vote of confidence in governments’ ability to fix the situation and perhaps avert the worst of recessions. Alas, with US rates already near all-time lows, monetary policy is running out of room to cheer stock markets.

Late yesterday, according to the FT, the hawkish group in OPEC (Iran, Libya, Nigeria, Iraq, Venezuela and Ecuador) are pressing for an emergency meeting to cut production on Nov 18. The regular meeting is scheduled for December 17. Oil is not that far from $85, the same level as December last year. Wait a minute-Iraq?

The US Crude inventory report was pretty good (for lower prices). Bloomberg reports that US fuel demand averaged about 18.7 million barrels a day during the past four weeks, the lowest since June 1999 and down 8.6% y/y. Gasoline supplies rose 7.18 million barrels, up 4% for the biggest gain in 7 years, and refinery capacity rose 8.7% to 80.9%, the biggest increase in refinery utilization in records that go back to 1989. Demand is not as inelastic as we thought.

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Barbara Rockefeller - Forex Trading Reports