Oil prices were mixed yesterday, with crude oil quotes lower, heating oil quotes higher and gasoline prices lower. None of the moves was especially large, and Dow Jones described prices as having been “frozen” ahead of this morning’s DOE report. The dollar rallied, which brought out selling, and the DJIA was off 47 points, which was also bearish for oil prices, but neither one seems to have captured the market’s imagination. Most curious, though, was the market’s inability to get fired up by events going on between Iran, on one side, and the UN, the Western Allies and Israel on the other. The way things look to us right now, Iran is on a collision course with war. [More]

The Dow Jones Industrial Average (DJIA) advanced 124 points yesterday, as stock market traders were buying on a couple of high profile mergers, featuring Xerox in one and Abbott Laboratories in another. So-called M & A activity has been subdued over the past year, and this sudden mini-burst of activity cheered stock traders. They took it as a sign that the economy may have moved on to yet another vista of potential growth, according to Dow Jones. Oil traders were impressed by the stock market move higher yesterday, and they were buying oil futures yesterday largely on the back of the gains in equities. [More]

The G-20 meeting concluded with the 20th Century’s three great Allies, the US, Britain and France, agreeing that “Iran’s nuclear activity was unacceptable,” as news of a second, secret uranium enrichment plant in Iran was revealed, and they jointly insisted “that the international community expected answers on 1 October and was also united in calling upon Iran to live up to its international responsibilities” {as a signatory of the nuclear non-proliferation treaty} This was a highly unusual way of ending an economic summit in the midst of the world’s deepest and most synchronized recession in three-quarters of a century. And it highlights the growing urgency with the Allies feel they must deal with Iran’s nuclear program. [More]

Crude oil prices broke beneath $67.00 and challenged $65.23. Heating oil broke under 170.00 and settled at its lowest point since July 30th. Gasoline prices finished at their lowest levels since July 13th. After following a pattern of up, then down and back up again, the last two days seem to have finally given the oil complex a sense of direction. There are now objectives to $58.00 in crude, 158.50 in heating oil and 151.37-151.77 in gasoline. [More]

The Federal Reserve kept interest rates at record low rates and told financial markets that they can expect these rates to last “for an extended period.” The Fed also announced that it will extend its $1.25 trillion purchase of mortgage-backed securities into next year. The vote to keep Fed Funds at zero to 0.25% was unanimous (10-0). The Fed did note signs of economic recovery, but its promises on maintaining the status quo should ease jittery traders’ minds. Despite the reassurances from the Fed, the DJIA dropped roughly 165 points from the day’s highs. At the same time, the US dollar made new lows and then rallied sharply in an apparent reversal day. [More]

It is just too early for the Fed to make dramatic changes, but when the FOMC minutes are released, pundits will agonize over every single word used, with particular emphasis on any additions or deletions from previous reports. Change is in the air, but it is a wind in the distance, not here yet. At some point, we all know that interest rates will need to rise, but we fully expect Ben Bernanke’s Federal Reserve to give us plenty of advance notice. Although it would be nice to crush the currency speculators and fortify the dollar, which would allow commodities to go home to their own fundamentals, this economy just is not robust enough to handle that. Higher interest rates could kill equities and housing. [More]

Jittery traders were looking ahead to a two-day meeting of the Federal Reserve starting today, to be followed in quick succession by a G-20 economic summit on Thursday. The fear is that policy-makers will start to take their feet off the financial accelerators that have propelled global recovery for the last year. Everyone knows that the party has to end at some point, that fiscal stimulus without restraint will lead only to inflation, but few expected the markets to be this nervous this soon. [More]

Oil prices were lower on Friday as traders took profits on long holdings. The US dollar rallied, and traders were liquidating longs in the oil market going into the weekend based on the dollar’s recovery. Despite that, the trend still seems pointed lower in the greenback, and Friday’s activity is more likely to be a one-time rally rather than the start of any longer-term advance (in the dollar). For the week, crude oil prices gained $2.74/barrel, heating oil gained 9.71 cents a gallon and gasoline prices were up 7.26 cents a gallon. The weaker dollar was the biggest factor behind last week’s gains, but the strong stock market also played a major role. The DJIA made new highs for the year more than once last week. And the stock market looks like it wants to continue moving higher from here. Between a dollar trending lower and equities trending higher, it will be difficult for oil prices to return to their basics. [More]

Yesterday was a quiet day, and crude oil prices were mixed. Heating oil prices were higher, and gasoline prices finished just into positive territory. Equities were lower and the dollar was very near unchanged. And traders were revisiting this week’s DOE report, which had both bullish and bearish factors. On the bullish side, crude oil stocks were down by more than had been expected. And total products supplied, using a four-week average, are now up by a comparatively blistering 3.69%. On the bearish side, refined products stocks were both up by more than had generally been expected and the year-to-year surpluses grew in both. [More]

The oil complex rallied again yesterday as traders reacted to a larger-than-expected drawdown in crude oil stocks, an advance of 108 points on the DJIA and yet new lows for the US dollar. Refined products stocks increased, but not by enough to push quotes lower. Last week’s figures were bullish for crude and bearish for products, and prices reacted accordingly. This week, same situation with the numbers, but all three markets advanced. The difference, as far as we can tell, was the dollar weakness and stock market strength this week. [More]