The energy complex trade is trading mixed to higher as the dollar loses value. Today is inventory report day as the API gave us a large crude draw possibly due to Houston ship channel closure due to fog last week and significant gasoline build. MasterCard indicates gasoline pump sales down -5.3% from a year ago. The market is really focused on Greece and perhaps today is the day we have a debt deal. The rumor mill is whirling. The EU may have made key concessions over it holding of Greek government bonds. The euro is climbing and the dollar is fading enough to rally commodities. Yet we have several Europeans state that the Eurozone can survive just fine without Greece. So this could be another promised deadline and/or deal that fail to materialize. Heating oil continues to find support from European cold temps and Atlantic basin refinery issues.
For the contiguous U.S., the December 2011 to January 2012 may be the fourth warmest behind 2006, 2002, and 1934. The November 2011 to January 2012 is the sixth warmest behind 2006, 2002, 2000, 1999, and 1934.
The market is focused on Greece today, but Fed Chr. Bernanke’s comments yesterday to the Senate Banking Committee should add caution to the health of our U.S. economy. He stated that although the U.S. economy has recovered somewhat from the recent deep recession, we remain very fragile and in a very slow recovery. He pleaded for the need to continue current tax cuts to avoid slowing the recovery further. Yes, this is a very painfully slow recovery and not one that will see energy demand quickly rebound. So fragile that interest payments on future foreign debt could tip us back to negative growth. We are very fortunate that interest costs have remained historically cheap.
