So who to believe. The equity markets overbought and getting retail investor money flow or the commodity market with a drop in inventories amidst colder weather coming in.
One of the reasons I had short term trading is that these little events cause enough stir to ruin a position. I'm still holding QID for about a 2% loss here. Within my acceptable margin. INDU and SPX have more upside based on the targets from those bowl patterns. But oil has been basing recently and its putting a damper on the NDX which is what I was expecting to happen. Then there is the Fed and TOMO injection today. I'm just going to sit on my hands and stay the course.
Oil futures broke above $60 Wednesday after crude supplies plunged unexpectedly last week and the United Arab Emirates said it would follow OPEC's lead and trim exports next month.
The benchmark contract on the Nymex, light, sweet crude, was soaring $1.40 to $60.75 a barrel. It was the first time crude passed $60 this week.
The rest of the energy sector perked up, with wholesale unleaded gasoline rising 1 cent to $1.50 a gallon. Heating oil was inching up 2 cents to $1.71 a gallon, and natural gas was jumping 33 cents to $7.42 per million British thermal units.
Crude inventories plummeted by 3.3 million barrels last week as imports dipped, according to the Energy Department's weekly update. The drop surprised analysts polled by Bloomberg, who had called for an increase of 2.87 million barrels.
Stockpiles of crude, which is processed into gasoline, heating oil and jet fuel, among other products, had climbed for the past three weeks. Supplies are a little more than 5% higher than this time last year.
With fewer refiners online, supplies of gasoline plunged last week by 2.8 million barrels, outpacing analysts' projections of a 125,000-barrel drop. Gasoline inventories, however, are 4% above last year.
Distillates, including fuels like heating oil, fell by 1.4 million barrels and now stand nearly 9% higher than last year. Although refiners have not been making as much heating oil before the winter, there are plenty of supplies right now to cover any spikes in demand. Inventories of distillates are 14% higher than last year.
Refining capacity declined last week to 86.2%, down from 86.3% the previous week.
On Tuesday, the UAE said it would follow Saudi Arabia's lead and trim production by 100,000 barrels per day. The move helped ameliorate traders' suspicions that OPEC members would not follow the group's decision to slash daily output by 1.2 million barrels starting next month.
Saudi Arabia has already told its Asian refining customers it will cut back exports by up to 8% in November.
Exploration and refining companies were climbing 1.2% on the Amex Oil Index, led by ConocoPhillips (COP) , Hess (HES) and Valero Energy (VLO) .
Shares of Conoco Phillips were climbing nearly 2% to $62.60 after its quarterly profit report. Earnings totaled $3.88 billion, or $2.31 a share, after items reduced its net by 37 cents. The company earned $3.80 billion, or $2.68 a share, for the same quarter in 2005. Revenue dipped 0.6% to $48.4 billion.
Only Repsol (REP) and Total (TOT) were declining, down as much as 0.7%.
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