This week’s jobless claims report was pretty uneventful, with the reported number coming in at 268K (1K above consensus estimates), representing an increase of 10K from last week.  While the actual move in claims was minimal, it did represent the 69th straight week that claims were below 300K.  That’s the longest streak since 1973, and if we go another five weeks below 300K it will be the longest streak since 1970.

Due to the fact that this week’s reading was the same as the level we dropped from five weeks ago, the four-week moving average remained unchanged at 266.75K.  This is just over 10K above the cycle low of 256K from ten weeks ago.

On a non-seasonally adjusted (NSA) basis, claims increased by 13K up to 261.6K.  For the current week of the year, this is the lowest reading in NSA claims since 1973 and 90K below the average for the current week of the year dating back to 2000.

Bespoke’s Paul Hickey appeared on CNBC’s Squawk Box earlier this morning to discuss the longer term impact of the Brexit vote on financial markets.  To view the segment, please click on the image below.

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In light of the global economic uncertainty that arose out of the Brexit vote last week, the fact that crude oil currently trades within 5% of its recent highs is pretty impressive.  Add to that the fact that crude has remained firm despite the strength in the dollar, and it only reinforces the resilience that the commodity has shown.  That being said, the chart does show a bit of a downtrend in the very short run, so either crude will hold its 50-DMA and make a higher high or the 50-DMA will fold under pressure.  Whatever the resolution, we should find out in the coming days.

One thing working in crude’s favor is the fact that inventories have been declining and following the script of their typical seasonal pattern.  According to this week’s inventory report from the DoE, crude oil inventories fell by 4.053 mln barrels compared to estimates for a decline of just 2.5 mln barrels.  It was also the sixth straight week that inventory levels declined on a week to week basis.  The chart below shows historical crude oil inventory levels by week for 2015 and 2016 as well as the average going back to 1983 and the last ten years.  While stockpiles are well above average no matter how you look at it, we would note that based on current levels they are now 49.8% above their historical average for this time of year.  That’s still a huge difference, but earlier this year inventories were nearly 54% above their historical seasonal levels.  You have to start somewhere, and the current declines in excess inventories are a step in the right direction for crude bulls.

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According to AAA, 46 million Americans will either hop in a car, plane, train, or boat this July 4th weekend, and while gas prices are up on the year, relative to prior July 4th weekends they haven’t been this low in over a decade.  The table to the right shows the YTD change for the national average price of a gallon of gas as of 6/29 along with the YTD change.  At a national average price of $2.294 per gallon, prices are up 14.9%.  While that’s the largest YTD change in five years, because prices are coming off such a low base the absolute price remains low.

The chart below shows a composite chart of the national average YTD change in price of a gallon of gas going back to 2005 compared to this year.  While this year started off on a weak note, beginning in February, prices started to follow their seasonal trend and rallied right through the beginning of June.  While prices were up nearly 20% on the year at one point, following the recent pullback the YTD gain has pulled back to less than 15%.  If the pattern continues to gold going forward, prices have likely peaked for the year and should trade in a sideways range for the remainder of the summer, and then start their seasonal decline after Labor Day weekend.

The final chart we wanted to show is the y/y change in gasoline prices going back to 2006.  Even after the nearly 15% increase in prices at the pump this year, the national average price is still down over 17% y/y.  While the magnitude of the y/y decline has moderated recently, what is most noteworthy about this chart is the fact that prices have been down on a y/y basis for nearly two years now.  When you start compounding y/y declines, it really starts to add up!

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