February is the shortest month and because of the alignment of the days it also had the fewest trading days. However, there was great volatility in the month because of the unsettled situation in North Africa and the Middle East. Last month the overthrow of Mubarak brought WTI prices into the $90 range. This past month the Libyan crisis plus anti-government demonstrations in Yemen and Bahrain have sent prices above $100. Now comes reports of demonstrations in Oman. The risk premium has sent the prices soaring, especially Brent which has reached $120.
Saudi Arabia has made good on its promise to increase production to cover for any losses of Libyan production. Kuwait is now considering increasing its production. As long as there are no street demonstrations in either kingdom, markets will be somewhat calm. For US consumers, the large and continually building inventory in Cushing has served as a buffer against even greater price hikes and volatility.
For the month WTI, +$4.90, $97.06; Brent +$11.16, $112.02; gasoline +23.95¢, $2.7301; distillate +18.12¢, $2.9208.
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