Europe has a PIIGS problem and the market was worrying about the euro while the dollar gained strength throughout the day. Both WTI and Brent showed modest decreases as did gasoline and distillate. The European banks holding Greek debt did not do particularly well with the stress tests administered last week. Greece, Portugal and Ireland are small economies but Spain and Italy have much bigger economies and then there is the cumulative effect of five Euro zone countries with sovereign debt problems and thus the great concern for the Euro economy. Additionally, there are no replacements yet for Libyan crude and thus the high premium for Brent over WTI and this premium is now over $20.
There continues to be no solution to the debt ceiling question here in the U.S. and this is also putting a crimp on demand forecasts.
Today, WTI-$1.31,$97.24; Brent-$1.23,$116.03; RBOB-3.19¢,$3.0974; HO-4.03¢,$3.0777.
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