Market Sentiment Watch: Extreme fear market conditions persist in the wake of Yellen's first day of comments as investors see a Fed policy of rate normalization as likely to continue despite growth pressure and flock to bonds and other safe haven assets. Europe tumbled overnight sending U.S. market futures sharply lower and took oil futures with them despite a weaker dollar. In energyland, oil remains weak on demand fears and the well known storage overhang. Overnight word or a third refinery potentially cutting runs sent futures lower and while we note that the cuts are so far modest at two refineries for a total drop of about 65,000 bopd the fear is this will spread due to high gasoline and distillate stocks with the end result being more crude sent to storage than otherwise would have been (deepening and/or extending maintenance season). As previously noted, we continue to sit on our hands instead of adding to names that are crude price or natural gas price suppressed. There were certain aspects of the inventory report yesterday that were pleasing to the eye but they are, for bears, easy enough to continue to ignore. Similarly, there were items in the OPEC outlook that were positive but again, not obviously so. Since we are in the middle of maintenance season near term pressure is expected and again, we wait. We do our homework and we wait. In today's post please find the oil inventory review (mixed bag on the headline numbers but we like the move lower in crude production as modeled by EIA's weekly model and expect more drop in coming weeks), the natural gas preview (tiny withdrawal due to last week's hot weather), comments on OII's quarter, PXD's quarter (nice beat, nice efficiencies, but not running as fast as expected and as such estimates will come off), and some other odds and ends.
- We get jobless claims at 8:30 am EST (F = 280,000, last week was 285,000),
- Yellen testimony begins at 10 am EST.
In Today’s Post:
- Holdings Watch
- Commodity Watch
- Oil Inventory Review
- Stuff We Care About Today - OII, PXD
- Odds & Ends
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