Suddenly the headlines seem to have turned to ‘oil over-supply’ when just 4wks ago they implied ‘short-supply’ vs demand. The data reflects the seasonal fall slow-down in refining to change to winter fuel catalysts while imports continue to come in giving us a short period of inventory build till refineries restart. Inventory builds always occur during seasonal catalyst changes.
The trends for energy consumption remain in place We even have a new high in Baker Hughes Rig Count after a 4mos period of being flat. Global economic demand has been steadily higher since 2009. The natural gas exports report is in 2wks and we should see a continuation of that trend which is quite strong as US nat gas prices are currently the cheapest globally.
Give us a couple of weeks and prices should be higher and the talk turned to ‘short-supply’ again.
Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis.
His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a RealMoney.com contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.
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