Crude Oil 4th November

After a much weaker than expected inventory figures and a little
stronger than expected QE2 figures it seems like Bulls have taken a
good control over the oil proceedings.
A more than 10 million draws in products over the last two weeks have
kind of cleared the 'Fundamentally Weak' sentiment that was dampening
every upside surge in the oil prices. With all three members of the
crude clan having higher than '5 year average' inventory let there be
no doubt that the fundamentals are still weak. What has changed is the
sentiment and the recent history of oil prices tell us that sentiments
are good enough reason to see a surge in prices.
Fed announced that it will put in 600 Billion Dollars into the economy
over the next 8 months along with the reinvestment of interest and
maturity proceeds of already existing securities. After a choppy
session last night the market is currently pricing the Dollar lower
and hence oil is stronger. Equities too continue to rise as I write.
Having broken the earlier high oil looks set for a decent surge in the
near future.
Talking about Brent spreads, they are once again stronger on North sea
maintenance. We will get the loading program figures by 9th of the
month and they will decide the further course of Brent spreads. Over
the last few months we have witnessed a front running over the
expectations of loading program and then a move on more informed
guesses a few days before the loading schedule is announced. We might
see a similar scenario unfolding this month too.
Watch out for the Forties Brent differentials in the spot market as
Brent spreads are closely following in its direction.