Oil prices reverse slide, big time, on greater demand

Demand for crude oil also reduces U.S. stockpiles, fueling big Wednesday energy rally. S&P 500, NASDAQ up, Dow down. Comey firing somehow to blame?

A West Texas oil pumpjack at sunset. (Image via Wikimedia)

WASHINGTON, May 10, 2017 – It’s another loopy Wednesday and another loopy trading day on Wall Street as the market continues with its backing and filling process. This kind of sideways trading action either marks the end of the Trump Rally or the beginning of a bear market. Or the beginning of Trump Rally Phase 2, depending on how you look at it.

No matter, really. We just try to make money no matter what’s happening. The problem is, despite all the learned gasbagging out there in Analyst Land, most of these bloviators don’t have any more of an idea as to what’s going on than we home gamers do when it comes to finding winning trades this spring.

Read also: Trading Diary: Allergan trade whacks our portfolio Wednesday

Putting wind in the market’s sails this morning was good news on the crude oil front, following last week’s litany of bad news, which extended into the beginning of this week. What changed? West Texas Intermediate (WTI) oil futures for one thing.

After drooping severely over the last several trading sessions as domestic oil stockpiles seemed to be overflowing, the latest government data showed a big drop in these inventories, indicating demand for gasoline was picking up as we near the beginning of summer travel season, which officially kicks off over the upcoming Memorial Day holiday weekend.

Not surprisingly, gasoline demand itself is already picking up, reversing its own slide.

Currently, WTI is priced at $47.74 bbl., up $1.85 on the day as of approximately 2 p.m. ET. That’s a whopping 4+ percent gain. Benchmark Brent (North Sea) crude, which usually sells at a premium to WTI, is currently priced at $50.59 bbl., up $1.86 as we write this, for a Wednesday gain of approximately 3.75 percent.

Stocks in the oil patch are generally celebrating today along with the price of crude.

But with all the irrational exuberance in the oil patch today, the market as a whole still isn’t moving up very aggressively. According to the financial whizzes today, that’s due almost entirely to the sudden firing of now-former FBI Director James Comey late Tuesday afternoon by President Trump.

Given the constant media attention – wanted or not – that Comey has been garnering, ever since he began his Hillary Clinton do-si-do last summer, adding Donald Trump, Vladimir Putin and Russian hacking to his repertoire as the fall elections approached, both Democrats and Republicans have been screaming for his scalp in alternating anvil choruses of invective.

But apparently, both Trump and the gradually refurbishing Department of Justice (DOJ) under Jeff Sessions were finally fed up with what they viewed as Comey’s constant media preening before Congress, before the cameras and before both of the above.

Comey’s latest public offense appears to have been his big flip-flop before Congress, claiming at one point in recent hearings that the notorious Weinergate laptop contained billions upon billions of incriminating emails re: the Hillary classified email flap; and then doing an about-face, stating that only a small amount of really juicy emails were found.

That was apparently enough for the Trump Team, and suddenly, Comey was out. We’ll leave it to the real and fake news sites to thrash about on the somewhat messy details.

Meanwhile, Congressional Democrats, as always, are demanding a “special prosecutor” (or whatever they call such overpaid “independent” attorneys these days) to “investigate” Trump’s allegedly scandalous dismissal of Comey. This is despite the fact that these same Democrats were demanding Comey’s dismissal by the Obama administration ever since the FBI exonerated Hillary of wrongdoing last summer, before un- and re-exonerating her yet again during the heat of last fall’s Presidential campaign.

Of course, if Obama had sacked Comey that would have been wonderful. But since a Republican President gave Comey the boot, we need a “special prosecutor” to “investigate.” The Democrats firmly believe, as did Emerson, that a foolish consistency is the hobgoblin of little minds. For their part, if the Stupid Party (i.e., the Republicans) does anything more than laugh uproariously at this latest idiotic Democrat demand for more “investigations,” they will again offer us ample prove that, well, that they’re still the Stupid Party.

Actually, what all this Washington Merry-Go-Round nonsense has to do with stocks is beyond this writer. But that’s what the political and financial punditocracy is saying today.

More than likely, “Sell in May” activity is continuing apace, save for the oil patch and other assorted sector pockets. So we’ll continue to lie low in the weeds until we can find some real financial news to report, as opposed to today’s usual ration of fake stuff.

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