Crude rose to its highest level in 18 months and it was all about the dollar. It was not about inventories as stocks rose but in the near term demand is not likely to increase greatly because 23,000 jobs were lost in March when 50,000 were supposed to be created. This was apparent when the figures for consumption showed a 2% fall from last year. It seems obvious that imports are increasing the crude inventory and refineries are betting that demand will increase and it is better to build product inventory now than produce higher cost product at a later date.
Prices are steadily moving up now as utilization remains around 80% while the refineries that are open are making money where as last year the expectations were that prices would continue to fall after rising so high in the spring and summer of 2008. The triggers for automated trading are looking at the numbers but don't seem to be looking at the underlying reasons for the inventory numbers. Of course the other reason is where do you invest if the dollar is falling and commodities are the better bet.
Yesterday, crude+$1.90, $84.51, gasoline +4.22, $2.3211, distillate +6.75, $2.1955. The distillate number is bad for the economy when you think about trucks and airplanes paying for higher priced product.
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