Wow. Can you say "sell-off"! This week has produced the largest three day energy skid of the year; I haven't seen anything this ugly since the last White Sox's game. Today's catch phrase was "panic sell-off", as the DOW slid to February lows and energy continued its three day collapse. Crude closed today at $77.11, diesel was down .07 plus cents and gas wasn't far behind at .06 cents. Last time we chatted crude was on the up tic, at $85.17, that is an $8 loss in a week.
It appears worries over Greece and other European nations debt crisis, once again pushed investors out of riskier oil and equities, into saver waters such as the dollar. Hopes for big energy recovery are diminishing as most are realizing that inventories far out weight demand and promises of great future demand are coming up empty. Today's sell off is being blamed on different reasons, most still based in speculation, with little concrete evidence. It is said that the Dow experienced some sort of "computer glitch", I have heard that one before, or the more likely 10,500 point sell stop orders are to blame for such high trade volume; Either way, it was ugly. Tomorrow will be interesting with most experts pointing to late day rebounds as the possible new direction, "buying opportunity" is the new catch phrase.
The short term outlook for energy is still weak with inventories high, demand down, and prospects of future demand looking grim. The best thing the energy market has going for it, is the three day beating it has taken, it could mark it ripe for the picking. Tomorrow is a new day, lets see what happens.
Good evening,
Zach Winter
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