Energy - turning higher as we wait for inventories and Fiscal Cliff Negotiations - east U.S. forecasts remain warm. Today is inventory day and the market is mixed in early trade as the dollar continues its trend lower since mid-November. Global equities as well as U.S. equity futures are generally higher and supportive of the energy market. The API was bearish products and bullish crude oil. Fiscal Cliff negotiations appear to be locked as President Obama states that there will no Fiscal Cliff deal unless Republicans drop their opposition to raising tax rates on the wealthiest Americans. We have gone from U.S. presidential election politics to Fiscal Cliff negotiations as the world watches and waits. Washington action impacts the U.S. citizen, but it also impacts global economies. Energy demand will increase or decrease according to what Washington decides. The dollar does not like the progress either as it has been trending lower since the elections were completed and Fiscal Cliff negotiations began.
Inventories today will impact the markets and if the API is correct, crude oil may attempt to rally, but bearish products should win the battle as crude oil remains plentiful even if we have a substantial draw. Again, we are in December and US crude oil inventories will be worked lower for year-end tax issues.
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