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Energy – higher with Fed statement of cheap rates and possible QE3 – natural gas report today. The energy complex trade is trading higher as the dollar loses value. March crude oil is trading $1.24 per barrel higher to $100.63 compared to $98.24 yesterday at this time. After the Petroleum Stocks Reports yesterday we faced a two sided trade. Later the Fed released that they will maintain status quo of cheap interest rates well into 2014 and the dollar quickly lost ground. Since that time, the dollar has faded to five week lows and commodities have rallied. This morning’s market continues to march higher. Bernanke is keeping the door open for QE3 as many are concerned with the Outcome of European economies. This is the most bullish commodity statement issued by the Fed as QE1 and QE2 produced a lot of commodity volatility. Higher crude oil prices are pressuring coastal refinery economics and a rally for crude oil could deepen the problems. Greece is negotiating a debt swap deal with creditors and Greek officials ahead of the major March deadline with slow progress. In the background, we have the progressing Iranian oil embargo and concerns over future supplies. Libya, Iraq and Saudi oil production increases should have no problem making up the lost Iranian oil availability. At current price levels, the trade knows demand is fading and will fade even more if Europe folds. Weather forecasts continue to be warm with no arctic cold spell. This conserves a lot of liquid gases and heating oil demand.
