A Combination Of Global Economic Factors Seem To Be Battling For Purchase In The Energy Futures Markets This Morning

A combination of global economic factors seem to be battling for purchase in the energy futures markets this morning. A drop in oil exports from Saudi Arabia and Russia seem to be applying bullish pressure while a sluggish economic outlook for China seems to be reason enough for some to paint the market a little more ursine. As of now, prompt month RBOB futures are down less than 1%, HO hovers around breakeven, and WTI is up a slight 70 cents per barrel.

Money managers cut their net positions in diesel futures last week, perhaps figuring the party is over after the 7-week run-up ended on Friday. They remained bullish on Gasoil however, cutting short positions aggressively. New short bets on American crude oil emerged, which might either explain or exacerbate the downward price trend we’ve seen in WTI over the past week and a half.

Baker Hughes reported a net decrease in operating oil production rigs last week, dropping the total down to 520 for the first time since February of last year.

Three storms in the Atlantic were named this weekend but Emily, Franklin, and Gert are all expected to stay out to sea, avoiding the US mainland. It’s the unnamed system churning in the Gulf that most have their eyes on now. The storm has an 80% chance of cyclonic development over the next 48 hours and looks to be headed towards the southern tip of Texas, possibly as north as Corpus Christi.

Tropical Storm Hillary made landfall in Mexico and disorganized over California this weekend, but the post-tropical remnants are dumping record amounts of rain in the region, leading to flash flooding. As if the storm wasn’t enough, a 5.1 magnitude earthquake also hit the area yesterday. There has been no significant damage reported as of this morning.

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