Deluge of crude

Register
May 5, 2014

 

US crude oil supplies are continuing to swell, reaching nearly 400 million barrels last week, the highest level since 1931. Oil supplies are rising even as refineries are running near full-speed, pumping out large volumes of gasoline and diesel fuel.

As the market assessed the rising energy supplies over the past few weeks, crude oil prices have fallen more than $4.00 per barrel to a five-week low, which helped pull gasoline and diesel fuel prices lower by as much as a dime per gallon as well.

Despite the titanic US supply of crude, global prices continue to hover near $100 per barrel due to ongoing supply threats. Unrest in the Syria and Iraq, rising tensions between China and its nearby neighbors over disputed territories, and the persistent threat of escalating conflict between Russia and Ukraine all threaten to interrupt the global flow of crude oil, which is helping to keep prices high.

As of midday Friday, crude oil for delivery in June was trading for $99.91 per barrel.

 

Young Cattle Charge Higher

Cattle prices have been rising rapidly as the US supply remains constrained. The beef industry is still struggling through a multi-year drought in Western states that has destroyed pastureland, making it difficult to grow the national herd. The relative shortage of animals is causing many ranchers to hold onto animals for the purpose of breeding, which further limits the market-ready cattle in the near term.

Most dramatically, the market for young cattle, known as “feeder cattle” in the industry, has been especially strong, with prices up 40% over the last year. Feeder cattle are typically year-old steers or heifers that are ready to be moved into a feedlot, where they are fattened on corn until they roughly double in weight.

The market for May feeder cattle reached an all-time record high again on Friday, trading over $1.84 per pound. Despite the shockingly high prices, there is still strong demand for feeders, since corn prices are still relatively cheap and the market for market-ready, or “fat” cattle, is exceptionally high. This price differential allows feedlot operators to continue to profitably buy feeder cattle, feed them corn and then sell the fattened animals a few months later.

 

 

Opinions are solely the writer's. Walt Breitinger is a commodity futures broker in Valparaiso, Ind.  He can be reached at (800) 411-3888 or www.indianafutures.com. This is not a solicitation of any order to buy or sell any market.

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Alex Breitinger

 

Breitinger & Sons, a division of Paragon Investments

Commodity Futures Brokers

 

219.707.5332

800.411.FUTURES (3888)

www.indianafutures.com

 

This is not a solicitation of any order to buy or sell, nor does it provide any recommendations in regard to the market.  Information contained herein is believed to be reliable, but cannot be guaranteed as to its accuracy or completeness. Past performance is no guarantee of future results or profitability. Futures and options trading involve substantial risk of loss and is not suitable for all investors. Clients may lose more than their initial investment.

 

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Comments

Darwin's choice

And yet, when the price of gasoline spiked, once, for a short time, under President Bush, democrats whined for years!!! Now, under obama, gas prices have been high for 6 years!!!! And, will stay where they are, and continue to get worse!

OMG.LOL.WT_

AGREE--- He even wants a carbon tax.

KURTje

Big Oil has always been a rip-off & will always be. That was before either Bush too.

The Big Dog's back

That darn Socialist Obama. Letting these oil companies drill everywhere for more oil. Communist, I say.

Darwin's choice

I agree with you dog! We've been telling you this all along.....

Why the change? Was your check late?

The Big Dog's back

Leave it to the low info person. You win the prize durwood.

Darwin's choice

Ahhhh dog, I'm playing you like a cheap banjo....

coasterfan

Average gas prices reached an all time high of $4.28 per gallon under Bush. So, it's also true that for nearly six years under Obama, gas prices have never gotten as bad as they were under Bush. Anyone who actually believes that they can blame any President for gas prices is beyond clueless.

dontknowmuch

True... and six months later it was down to $1.70

True... its never been as high under Obama

True... about blaming the president. I remember dimwitted Dems wanted to blame Bush for it and now dimwitted Repubs are doing the same with Obama.

What's sad is how much we're producing and seeing no affect on a gallon of gas. And summer's around the corner and we'll pay dearly

I

http://www.thegatewaypundit.com/.... Clueless as they are, Coaster will still fall in line and worship at the alter of the Dims!

dontknowmuch

Obama is the president who has literally said he WANTED gas prices to go up as long as the increase was gradual so he wouldn’t get blamed. Obama is the president who appointed an Energy Secretary who is literally on the record saying he wanted to see U.S. gas prices at $9-$10 a gallon.

The shocking gas prices Bush faced in 2008 were due to the fact that Democrats took over both the House and the Senate in 2006 and refused to allow ANY domestic oil production or refinery construction WHATSOEVER until Bush finally issued his executive order in frustration.

downthemiddle

Don't forget that "Electric rates will NECESSARILY skyrocket".... now, who said that? Hint: bho in a speech about shutting down the coal industry. Do you think that didn't affect any union coal miners?
----

DKM.... Debating the likes of coaster is fruitless... they are impervious to facts. They vote the way their union tells them to, often to their own discomfort. Idiots.

The Big Dog's back

bullspit.

downthemiddle

A pipeline might be handy...

Pete

Obama "sold" that pipeline down the river for $100,000,000 in campaign contributions.

There is now a starting price for bribing the White House.

downthemiddle

Tom Steyer. That and Warren Buffett owns a railroad of tank cars. There have been a number of railroad accidents involving explosions. Where are the greeenies on this??? Already in obama's pocket.

Dems: google ''wealthy California democrat keystone" then go to your union halls and ask who to vote for.

downthemiddle

See above

Really are you ...

The price we pay at the pump is directly related to supply and demand. Well, that is what was hashed out on here the last couple of years. Big oil is reaping the benefits of our reliance on the consumption of oil. This is not a world wide boost in production. This is a United States boost in production. Take care of America first. No! We have to take care of the rest of the world first before we take care of our own. New opportunities to create new or improved technology, endless.

Maybe I need to go to effective speech classes or something to that effect. Why? The combustion of fossil fuels or nuclear rods DO NOT DIRECTLY MAKE ELECTRICITY. The combustion of fossil fuels and use of nuclear rods is power inducing power. A carbon tax or an increase in the price for home electrical consumption is simply outrageous. Electricity is not made or created, it is laying all over the place waiting to be induced. Certain materials are more inductive than others, but it is waiting. I can make a generator that is compact, combustion free, nuclear free, reliance on outside influence free is possible. It's sole purpose is to generate electricity right where electrical power is needed. Electrical power for an electrical motor in a car or electrical power supplied to a dwelling. Reliance on fossil fuels reduced. Wear and tear on an outdated power grid distribution system reduced. Our military might effectiveness increased. New family wage jobs/ careers obtained around here, bonus. Imagine the new technology that would be available if you were able to generate electricity needed right where you needed it to power something. Battery free, combustion free, and external forces free. Just raw power.

downthemiddle

Yep... on a gallon, the oil companies make 4%...

The govt taxes at 15% and that's just fine.

Darwin's choice

I'll buy/lease one from you. I'll be the first one to want to be off the grid!

ohioengineer

I am old enough to remember the first oil embargo of 1973. From that day until the present, multitudes of so-called "experts" have been predicting that the U.S. would run out of oil (pick one): next year; five years from now; or ten years from now. Instead, today we have greater oil reserves in the continental United States than all of Saudi Arabia. Meanwhile, our government spent billions - perhaps even trillions - of dollars fighting an energy crisis that never happened. In a perfect world we would learn something from this folly of trying to predict the future, but instead it is business as usual as Washington prepares to throw our tax dollars at the next "crisis."

Dr. Information

Obama's to blame for the 3.50 plus gas for the last five years.

grumpy

The reason fracking is economically feasible is the price of oil is high. If it was low it wouldn't be drilled, but natural gas takes less to frack thus the drop in price for NG. Same with oil sands. If oil wasn't high in price, it wouldn't be used. Same for North Sea oil, Alaskan oil and any deep off-shore drilling. Middle East oil is cheap to drill and pump, expensive to ship to be refined.