Analysts chose to believe that increased U.S. industrial production would raise prices after they had fallen because China's central bank announced for the fourth time in 2 months that reserve requirements would go up. There is another market issue and that is the growing premium for Brent which made me believe earlier there was a problem with supply in Europe. However, the high inventories in Cushing, OK, are helping to keep prices lower in the NYMEX while supplies in Europe are not doing the same thing for Brent on the ICE.
This past week has seen a tremendous leap in prices: crude +$3.51, $91.54; gasoline +8.15¢, $2.4946; distillate +15.77¢, $2.644. The dollar's weakness has overcome significant reservation about demand and supply. The TAP will be shut down over the weekend again. Analysts do expect crude to fall next week as refiners start to import crude and prepare crude slates for the spring and summer runs.
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