The Daily Dose; 15.2 million reasons why oil should’ve tanked today.

-Vaccine progress kept oil from moving decidedly lower.

-Is there a lagging negativity in the works.

Basketballs bounce less than crude oil prices did on Wednesday, with intraday movement swinging by around plus or minus 1%. That followed a report of a sizeable build in U.S. commercial crude oil inventories, reports of explosions at Iraqi oil wells and slow hiring in the United States, among other things. What could be supporting the price of oil is the positive news on vaccine programs. Without that, it would’ve been a decidedly down day for crude.

Chart trends for US crude on Wednesday looked like a heart rate monitor, with West Texas Intermediate at one point trading up about 1% and later down by around 0.7% before coming back toward even late in day. By 2:30 p.m. ET, the price for Brent crude oil was down 0.08% to trade at $48.80 per barrel.

Only crude oil in the Strategic Petroleum Reserve saw a decline last week, dropping by 100,000 barrels. All other commodities reported gains, with US commercial crude oil inventories coming in 15.2 million barrels higher than the previous week, the EIA reported Wednesday. Total products supplied, a proxy for demand, saw the four-week moving average decline 7.5% from the same period last week. GasBuddy on Wednesday reported that its data showed gasoline demand on Sunday was down 10.2% from the previous week. There’s simply nothing to do and nowhere to go.

In the United States, that nod to The Ramones seems work related. While it’s a rear-view look, there are lessons from history in the October JOLTS report from the Labor Department. Job openings last month increased by 158,000 to 6.65 million, but that’s still below the 7 million mark from February.

“The labor market remains miles and miles away from the best economy in 50 years in February before the pandemic struck,” Chris Rupkey, chief economist at MUFG in New York, told the Reuters news service.

That suggests there may be something of lagging negativity developing. We noted Tuesday that some of the US protections meant to keep people from getting evicted expired, leaving us with debt and a bit of a housing issue. US lawmakers are busy working on a stimulus package, but those same lawmakers are still distracted by the outcome of the Nov. 3 election. Some of that pressure will inevitably erode by mid-January when Joe Biden occupies the White House and vaccines are active in the United States, but we have several jobs reports and EIA inventories to go before we get to that point.

Elsewhere, we noted that China was moving into the wake of the United States in Iraq with a pre-paid oil deal. Iraq remains a testing ground for democracy and a steady international will. We’ve seen reports that terrorist entities may be strengthening in Anbar province. One of the world’s leading oil producers still struggles with its own protection, showing that risk runs through many places. On Wednesday, the Iraqi Oil Ministry blamed terrorist for explosions at two wells at a small oil field in the north of the country. While small, it shows that militants continue to thwart Iraq’s recovery and endanger the broader market.


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