This comment from Tuesday's "Oil: Where We're At" was very fortunate:
We've also been negative on WTI since July 22's "Oil Looks Extended: "Huge Backwardation In Crude Oil" (and what it means for equities)" at $107.03 and the 24ths "Oil: WTI Falls Most in a Month, Bakken at 7-week Low" at $105.18.From the Chicago Mercantile Exchange:
So, for now anyway, today's $103.13 (low $102.67) looks like a gift...
The macroeconomic data from several fronts was positive over the last twenty four hours along with comments out of China indicting they are targeting reasonable growth. Adding to the positive sentiment was a neural Fed FOMC meeting outcome that did not indicate anything new regarding an end of QE3. Quantitative easing continues and short term interest rates remain at historically low levels. Most global risk asset markets… including the oil complex have reacted to the upside to the data and the comments as a new month of trading gets underway.
The monthly employment cycle in the US started with the ADP private forecast coming in with a larger than expected gain in new private sector jobs while US GDP for Q2 beat all of the expectations coming in at 1.7 percent while the Commerce Department back adjusted several quarters to the upside. The US economy remains in a steady but slow growth pattern and one that suggests the current pattern will continue. With the Fed not signaling a premature ending of QE3 along with the steady US economic growth pattern the US economy is acting as a positive catalyst for equity markets as well as most risk asset markets.
Not only did the comments by the Chinese leadership indicating their goal for steady and stable growth add support to the market so did the latest PMI data released by the National Bureau of Statistics indicating that China's energy sensitive manufacturing sector is still in the expansion mode. The July PMI Index came in at a better than expected 50.3 exceeding the consensus of 49.8 as well as the 50.1 for June. The market sentiment for the world's main economic and oil consumption growth engine may finally be turning toward a more positive outlook....MUCH MORE
