Tuesday October 18, 2005
E-TV Futures.com Interview
Expert: Matt Odom / Odom & Frey Futures & Options
Interviewer: Sara Eisen
Sara Eisen – U.S. crude lost $1.21 to $63.15 a barrel after a gain of 2.8 percent on Monday. London Brent crude was $1.27 lower at $59.30 a barrel.
Wilma gained strength in the Caribbean Sea, but its path was set to veer east towards Florida and away from the heart of U.S. oil infrastructure in the Gulf of Mexico.
Oil prices retreated on the news, so it seems that Wilma will not impact oil. What are you looking at next to influence on oil prices?
Matt Odom – As you mentioned the storm track for Wilma is more in line with what we saw from Charlie last year where we saw the storm make landfall on the Gulf Coast of Florida…
and travel eastward across the state towards the northern portion of Florida and into the Atlantic. This is good news for the energy markets in that there are no platforms in that area of the Gulf nor are there any refineries within that track. This has allowed the market to relax somewhat and become more focused on the immediate supply and demand picture to dictate prices.
The most recent EIA data reflected a slight build in Crude inventories and a draw on the Unleaded and Heating Oil supplies. While the draws on gasoline and Heating oil aren’t exactly Bearish, the demand numbers that accompany that data were less than Bullish. The fact is that gasoline demand fell for the 4th week in a row (By 2.8% as compared to this same time last year) and that more or less trumped the IEA projections of increasing demand over the next year.
Weather will continue to be the big factor here over the next few weeks as refineries continue to come on line over the next few weeks. While the prospect for future hurricanes is still viable I’m more concerned about the first cold snap and what the supply picture will be when that hits. Katrina
Sara Eisen – How far down will oil go from here?
Matt Odom – With today’s trading range we didn’t break any kind of trendline support and I suspect we will retest the 6035 mark in the next couple of days but if we break through that in the next week or so then my downward price target would be around 5800 during this quarter.
Sara Eisen – Thank you Matt. As always it was a pleasure speaking with you today and that does it for today’s Crude Remarks.