Oil Down Again
The market is largely unchanged this afternoon after a slightly higher opening, it has slipped with another hit to the price of crude oil. On that note crude oil inventories have declined in nine of the past ten weeks after peaking at 535.5 million barrels for the week ending on March 31.
The problem today is the drawdown of crude was short of consensus and hence the selling has crude off more than 3%. The reaction seems harsh in light of the longer term trend of successive declines, but it reinforces the notion of limits to demands in the face of massive supply.
Now West Texas intermediate must hold $45.00 (on closing basis) from a technical point of view, or call for a “three handle” will reemerge.
Questions about the consumer are not cleared up this morning after the release of May Retail Sales which missed consensus.
Internet is higher month-to-month and year-to-year along with grocery and clothing. However, I’m surprised about clothing since pricing has come down dramatically.
I continue to think building materials/home improvement is the place to be invested.
As for the overall market, I like the overall resolve as former pivotal resistance points are holding as support.
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