Energy – higher trade, Iran’s threats, bearsih API, Stronger dollar, Weaker euro – stocks report day. The energy complex trade is trading higher as the dollar trades also trades higher. February crude oil is trading $0.05 per barrel higher to $99.40 compared to $100.95 yesterday at this time. Weekly U.S. petroleum inventories and Iran’s threat of closing the Straits of Hormuz are the focus today. First, API petroleum stocks estimates indicated a very large builds and a bearish influence to the market. The market doubts the reports as past correlation history has been messy as traders feel the API and DOE do not always agree. Iran threatens the closure of the Strait of Hormuz if further sanctions are imposed upon them. Concern in regards to Iran’s Nuclear weapon development has pressed the world to place more and more sanctions upon Iran. They want to pressure Iran to spot the nuclear development of weapons. Verbal jabs have been thrown at opposing nations as they discuss more sanctions. These threats are pulling Brent crude oil higher compared to WTI Crude oil values. Libyan crude oil production is ramping up. North Korea has dubbed Kim Jong Un as the “Great Successor” and given support as North Korea next leader. The U.S. dollar continues to rally against the falling euro and pressuring commodities lower in general. The low volume holiday trade allows for more erratic and volatile energy markets.
It appears to be a very erratic volatile final two trade days of 2011. The table has been set with a lot of market variables moving in different directions. Normally, a strong dollar would move commodities lower. At strong API builds would drop energy prices. Euro debt crisis does not support future energy consumption. Increasing Libyan crude production is bearish. Yet, we have the Iranians holding this market hostage with more verbal jabs.
