Central Valley Cooperative

Energy – Higher as equities move higher, dollar lower – EU agrees to Iranian oil embargo. The energy complex trade is trading mixed to higher as the dollar values fades.  March crude oil is trading $0.87 per barrel higher to $99.20 compared to $99.50 Friday at this time. The energy market is rebounding from December 21 lows as the EU officially agrees to an Iranian oil embargo effective July 1 for existing contracts and immediately for new contracts. The embargo is set to usher Iran away from the development of nuclear weapons. The EU continues to work over debt plans. Greece in particular appears deadlocked with bondholders as Greece moves closer to default status. Potential civil war appears in the future as the Syrian government rejects the Arab League request to hand over power to a deputy and set up a new unity government. Markets continue to consolidate as global equities are starting 2012 strong. The trade continues to be extremely skeptical of the EU to organize a plan, but deadlines are not this week and discussions continue. A weaker dollar and stronger equities support ideas of stronger energy demand. Past reports indicate energy demand is very poor in the U.S. and Europe.  So we are just treading water with no market direction.