December 14, 2010

The Nazis finally met their match in the outskirts of Moscow in early December 1941.
The rush to get to $100/barrel oil has hit a snag this December but it is not yet time to do more on that analogy. There are a number of activities that are leading against the rising to that price point. The inflationary quantitative easing is definitely in analysts' minds. U.S. gasoline demand fell 3%last week and gasoline futures dropped 0.8% at settlement with the release of that news. It is hard to talk about an improving economy in the light of demand decreases. Unlike the German advance led by Guderian, oil price increases are moving steady and there is no blitzkrieg to higher prices yet. With all the doom and gloom, retail sales are up and that is hard to configure with gasoline demand being down.

Today, crude -19¢, $88,41; gasoline -1.96¢, $2.2989; distillate +0.28¢, $2,4685.

December 10, 2010, part 2

The Chinese government is doing the right thing by trying to control inflation but oil traders saw this as slowing down the economy and reducing oil demand. Crude and product prices dropped and all eyes are now turned to the OPEC meeting in Quito, Ecuador. No major decisions are expected from the OPEC meeting but there may be indications of how the Cartel wishes to proceed.

For the week, crude -$1.40, $87.79; gasoline -4.28¢, $2.3093; distillate -2.99¢, $2.4575.

December 10, 2010

Sixty nine years ago today, Captain George McMillin, USN, surrendered on Guam, after a brief battle against Imperial Japanese forces. The were about 550 sailors, Marines and militia with a total of 12 automatic weapons matched against about 5,500 Japanese soldiers, fully armed with modern weapons. Isolationists in Congress led by Rep. Joseph Martin (R-Mass.) had opposed any defensive measures that would have armed the sailors, Marines, and militia and enabled them to give real resistance. Three militia men were beheaded near the Governor's residence in Agana.

Guam was initially bombed on December 8 at 8:30 a.m., three hours after Pearl Harbor was attacked. Some residents of Guam were unaware of the attacks on Pearl Harbor and were attending Mass at the Agana Cathedral as it was the Feast of the Immaculate Conception. The bombing attacks continued until ground trooops came ashore on December 10. The brutal Japanese occupation lasted until July 21, 1944.

December 9, 2010

Gasoline took center stage today as a Hess refinery in the Virgin Islands was shut down for unexpected repairs and concerns arose about gasoline supply. This 3.6¢increase was modest but pronounced and there was barely any movement at settlement foe either crude or distillate. The dollar was steady and many traders were sitting on the fence because of the OPEC meeting this weekend. Although there was an announcement that unemployment claims were slightly down, there was no reaction from the markets as there has been a tendency for those numbers to be revised at a later date.

Today, crude +11¢, $88.39; gasoline +3.6¢, $3.3406; distillate +0.69¢, $2.4676.

December 3, 2010

Inventory builds and rising unemployment could not overtake the falling of the dollar and crude went up $1.19 as it now begins to test the $90 ceiling. Even news that fuel consumption fell for the week ending November 26 could not keep crude from rising. Helping the bullish thinking are the future projections of $110/barrel and $120/barrel crude that sees increased demand and therefore these higher prices.

For the week, crude +$5.43, $89.19; gasoline +14.18¢, $2.3521; distillate +17.62¢, $2.4874.

December 2, 2010

News of an improving economy and the fall of the dollar versus the euro led analysts to ignore oil fundamentals about supply and demand and caused crude and both gasoline and distillate to escalate in today's trading. Crude is now trading where it was over two years ago when prices were falling rapidly. It is now rising in fits and starts but steadily rising since October 1 and staying in the $80s.

Today, crude +$1.25, $88.00; gasoline +5.49¢, $2.3553; distillate +4.9¢, $2.4546.

December 1, 2010

It was Wednesday but you could not tell that there was a crude and gasoline inventory build as crude rose 3.1% in one day because favorable U.S. employment numbers, an expansion of Chinese manufacturing, and news that the IMF would support European efforts to address the sovereign debt problem of Italy, Portugal and Spain.

Today, crude +42.38, $86.75; gasoline +5.04¢, $2.3004; distillate +9.71¢, $2.4056.