Pumpkin Spice Oil: The WTI Bulls are Out
We hope everyone enjoyed the long holiday weekend. Labor Day has been a national holiday in the United States since 1894. To many, it may signify picnics, parades, or a day off from work. Organized by the Central Labor Union, the first Labor Day holiday was celebrated in 1882 in New York City. On that day, 10,000 workers took unpaid time off to march from City Hall to Union Square. New York was also the first state to introduce a bill recognizing Labor Day, but Oregon was the first to pass such a law in 1887. By 1894, 32 states had adopted the holiday. For some, Labor Day is bittersweet as it reminds us of the transition of summer into fall and, to make things worse, some clown came up with the idea of putting pumpkin spice in my coffee. No…just no. Remember, it’s 5 O’Clock somewhere.
After a relentless drawdown of crude oil inventory, traders fell out of bed and recognized that perhaps supply isn’t keeping up with demand. The Tank Tiger was cited last week in a Reuters article on this very topic. U.S. crude inventories experienced a significant drop of 10.6 million barrels last week and inventories are now lower than the 5 year average. OPEC+ has hooked the big fish and is reeling it in very slowly. Brent crude ended the week at $88.49 a barrel and WTI closed at $85.02, securing a third straight monthly gain and hitting highs not seen since last November. We’re expecting more details on Russia’s new OPEC+ supply cut agreement very soon. Combined with a now favorable external economic environment, the short-term outlook for oil prices appears bullish and the hedge funds are piling in. They all run to the front of the boat, then they all run to the back of the boat.
Not to be outdone, The S&P 500 rose 2.50% for the week with gains in four out of five sessions. The Fed has been drooling every month with anticipation that they will finally see some slack in the jobs market. There is now growing anticipation, with a cooling economy, that the Federal Reserve could hold off on further rate hikes. We will watch for the smoke signals coming out of The Eccles Building in Washington, D.C., which serves as the Federal Reserve System’s headquarters. Speaking of the nation’s capital, The Tank Tiger is looking forward to meeting and greeting shippers and schedulers in Washington DC next week at the Colonial Pipeline 2023 Shipper Forum: “Fueling Freedom for Generations to Come”. Let us know if you plan on attending and perhaps we can set up a meeting with you. Salt! Salt! Salt!
