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The Bears are out on Crude Oil…is it warranted?
Crude and petroleum product prices slipped lower Sept. 8 despite a bullish government report on US inventories before President Barack Obama’s speech to a joint session of Congress.
Obama proposed a $447 billion jobs package he claimed would stimulate the economy without adding debt. But industry analysts and investors apparently aren’t buying into that plan.
Ahead of Obama’s speech to joint houses of Congress, the Dow Jones Industrial Average “pulled back just over 1% while oil was relatively flat,” said analysts in the Houston office of Raymond James & Associates Inc.
“Natural gas remained in positive territory gaining 1%. The Oil Service Index and SIG Oil Exploration & Production Index (EPX) each traded down with the former retreating 2% while the latter only posted a 1% loss,” JRA analysts said. “This morning, the President’s speech is taking a back seat to the G-7 meeting as Dow futures are down a modest 50 points while crude and natural gas are also trading lower.”
Meanwhile, they said, “Crude posted an larger than expected draw last week, made even more bullish by the fact that it included another sizable release of barrels out of the Strategic Petroleum Reserves. Specifically, commercial crude stocks fell 4 million bbl (down 8.9 million bbl if you back out SPR release) vs. a consensus call for a draw of 2 million bbl in the week.”
