Article / 18 August 2016 at 11:15 GMT

Daily Shot: US gasoline inventories drying up Team / Saxo Bank
  • US gasoline stocks decline
  • Crude production stabilising
  • Gold inversely correlated to real rates 

By Walter Kurtz*

We begin with the energy markets where US gasoline inventories declined more than expected for the third week in a row. 

1. Gasoline and crude oil futures rose in response.

Gasoline and oil Gasoline stocks Days of supply Gasoline RBOB
 US crude oil production seems to be stabilising (for now) while imports rise.

WTI crude oil

 Nonetheless, crude oil inventories are finally declining, pushing crude prices higher again.

Crude prices
 In other commodity markets, Credit Suisse tells us that gold is inversely correlated to real rates (TIPS yield), not inflation expectations. 

While this is not a new concept, it's nice to see the relationship hold (most of the time).

Silver continues to test the $19.60/oz support level (in a descending triangle). Long silver remains a crowded trade, vulnerable to a breakout to the downside.

Aluminum prices are grinding higher (supposedly) due to demand from China's auto industry as well as relatively tight inventories.

 — Edited by Michael McKenna
Walter Kurtz is an alias

**This is an abridged version of the Daily Shot. To subscribe to the full version, link to the Daily Shot and select the appropriate command. E-mail addresses are never shared with anyone.


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