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Macro Pulse highlights recent activity and events expected to affect the U.S. economy over the next 24 months. While the review is of the entire U.S. economy its particular focus is on developments affecting the Forest Products industry. Everyone with a stake in any level of the sector can benefit from
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Wednesday, November 4, 2015

October 2015 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil ticked higher for a second month in October (+$0.74), to $46.22 per barrel. The price increase coincided with a slightly weaker U.S. dollar, the lagged impacts of a 165,000 barrel-per-day (BPD) decrease in the amount of oil supplied/demanded in August (to 19.8 million BPD), and an advance in oil stocks. The monthly average price spread between Brent crude (the predominant grade used in Europe) and WTI widened by $0.07 in October, to $2.21 per barrel. 
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The increases in spot and futures prices were attributed mainly to investors covering short positions. For the week ended October 23, the U.S. Energy Information Administration reported an increase of 3.4 million barrels in crude supplies, well above the increase of 1.6 million barrels forecast by analysts polled by Platts, but short of the 3.7 million-barrel rise analysts surveyed by The Wall Street Journal had expected. “It looks like the majority of shorts got ahead of themselves and were looking for another high single-digit build that didn’t pan out, so they all ran for the door at once to unwind,” said analyst Tyler Richey. Greater refinery activity (utilization in late October was pegged at 87.6% of capacity, compared with 86.4% in mid-October) also pushed prices higher by increasing the amount of crude used for refining. Finally, crude-oil imports were also down about 439,000 barrels a day for the week and petroleum-product stockpiles fell. 
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The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

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