Sometime during the trading session today, WTI passed $100 before closing at $98.05. Brent has spent most of the month over $100, passed $111 and closed at $111.20. What's heating the market up is not just the unsettled situation in Libya with a madman using his troops to fire on demonstrators. It is that the whole situation in North Africa and the Middle East is unstable. The Saudi petroleum minister may promise to produce enough to cover the shortage caused by the Libyan industry under siege but what if demonstrators appear on Saudi streets. Will Saudi Arabia be able to supply or will the regime need to focus on survival. WTI was last at $100 in October of 2008 when it was headed down. This price channel is headed the wrong way if the economy is to improve. Every $10 increase for crude means a 0.25% to 0.50% decrease in GDP.
Today, WTI +$4.23, $98.05; Brent +$5.41, $111.20; gasoline +6.28¢, $2.712; distillate +11.22, $2.9035.
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