The market was pressured most of the session after the latest read on crude oil storage levels was released on Wednesday. The news sent West Texas Intermediate (WTI) tumbling big time, and the major averages slumped as well.

The U.S. Energy Information Administration (EIA) saw a massive surge in crude oil, matching the tone of the American Petroleum Institute (API) report on Tuesday that lifted the total crude stock to a record 528. 4 million barrels (this does not include the strategic reserve).

There was a time when the Street could forgive pops in crude levels if there were corresponding declines in gasoline inventories, but it’s become so egregious that there is no rationalizing. Yesterday, the number wasn’t even close as the crude oil inventory build was more than four times its consensus estimate. 

This isn’t good news for the economy as we learned when crude crashed; there is no offsetting correlation to things such as higher consumer spending. Instead, what the LinkedIn WorkForce Report shows us is that a major chunk of the underlying momentum in the job market from higher crude brings projects and roughnecks back to work.

There are skills gaps, including:

• Drilling and Oil Well Management
• Subsea Engineering
• Offshore Operations
• Geology

We need crude to rebound; near-term news from the Organization of the Petroleum Exporting Countries (OPEC), along with today’s rig count is going to be crucial.  (I think rigs came on too fast, counterbalancing the lower production from OPEC; there has to be a more gradual recovery to stabilize prices and the temperament of Saudi Arabia & Co.)

Crude has to find a way to nestle up to $60.00 in order to bring more rigs and big-time construction projects back on the line. 

Today’s Session

The calm before the storm always leaves the market vulnerable,  so this morning stocks will open lower ahead of employment data tomorrow morning.

Happy Birthday

Pressure is coming from the continued sell off in crude, with WTI now below $50.00.  There isn’t a sense of panic, but there are also general mixed emotions that come on most birthdays. In this case, the eighth birthday for the current bull market (or anniversary for end of the last bear market).

To a degree marking these kind of anniversaries is largely a trivial pursuit, but it underscores the potential for this rally to continue. It also points to the fact that those that play the waiting game, always lose out because they never get in or miss gains by half by being too clever. 

There are better metrics than time for judging risk associated with bull markets, but for now, let’s just sing happy birthday…and not blow out the candles.