The energy complex is trading lower overnight as the dollar firms. The dollar charts indicate the dollar is breaking out to new trade levels not traded since last March 15. This is important as the dollar appears to be making a key low on the charts and the break out could lead to a significant rally. Equities are busting out lower trade ranges. The U.S. and Chinese economy appear to be slowing as the EU faces additional economic emergencies from Greece to Italy. Inventories this week should build products as we are past the 4th of July weekend draw.
OPEC said in their monthly report that the increase in oil demand will fall from 1.40 mbpd to 1.36 mbpd increase in 2011 as global economies continue to weaken. OPEC June oil production increased to 29.6 mbpd, up 0.5 mbpd from May led by increased Saudi oil production. They believe demand will increase later this summer. Strong Chinese oil demand is expected to offset OECD oil demand weakness. This counters yesterday’s report indicating Chinese crude oil imports dropped 5.7% to 4.81 million barrels per day to a multi month low. Washington is scrambling to control debt and raise the debt ceiling. French sources report Gadhafi is ready to move on. Syrian leadership is in jeopardy of losing global support with many infractions of human rights. Afghan’s President’s half-brother was assassinated.
Record exports of U.S. gasoline, distillate, jet fuel, and propane have curtailed the building of U.S. stocks in the first half of 2011. Most U.S. exports have originated form the U.S. gulf coast refineries. The Central and South American regions are the prime benefactors. Certainly the slowdown of the U.S. economy is hurting the demand for U.S. products. The cheap U.S. dollar aids product exports.
