Yesterday all eyes were on Greece and the confidence vote in the new and supposedly improved Papandreou government. It appears it passed the test as traders expected and as far as I know Athens is still there and a no fault, or should I say no default, at least for this particular moment. The Euro may have rallied a bit, but oil seemed unimpressed so now the market will focus on the Fed and of course those precious oil inventories.
The American Petroleum Institute seemed to suggest the return of the Keystone pipeline will show that oil supply will continue to build. Yet it may be the signs of rising oil production around the globe that will help the oil bear hands. The International Energy Agency is seeing signs of increased Saudi Arabian production and Kuwait and even Venezuela seem to be increasing production. The Brent crude versus the West Texas Intermediate spread seems to have topped out so Brent should continue to move closer to WTI.
David Bird of Dow Jones reports, "Nearly 1 million fewer Americans will travel by automobile over the July 4 holiday than a year ago due to high gasoline prices, a survey by travel group AAA released Wednesday shows. Car-travel over the holiday period will drop 2.7% from a year ago, with 32.8 million Americans hitting the road between June 30 and July 4, down from 33.7 million a year ago. This year's figure is down from the record 35.1 million auto travelers hit in 2002, 2005 and 2007, but above the recession-hit 2009 low of 26.7 million travelers. Still, auto travel will make up 84% of total holiday trips. A little more than 3 million travelers, or 8% of holiday travelers, will fly over the weekend, a 9% rise from a year ago. That's despite an 11% rise in the average price of the lowest round-trip ticket for the top 40 U.S. air routes. The remaining 8% of travelers will go by rail, bus or watercraft. Although the national average retail price for regular gasoline has dropped 21.5 cents a gallon from a year ago, at $3.637 a gallon on Tuesday, the price is 33%, or 90 cents a gallon above a year ago, according to AAA Daily Fuel Gauge Report. AAA said it expects prices to be around $3.60 to $3.70 a gallon during the holiday weekend. The number of total travelers making trips of 50 miles or more during the holiday weekend by all means of transportation will be down 2.5% from a year ago, to 39 million Americans, AAA said. A survey of intended travelers showed that 56% said gasoline prices won't impact their travel plans. Of the remaining 44%, most said they would economize in other areas to pay fuel bills, while some would take shorter trips or travel by different modes of transportation. AAA said its travel forecast, based on economic forecasting and research from IHS Global Insight, included a survey taken between May 26 to May 30. AAA's daily gasoline prices reported by were about 14 to 21 cents a gallon then compared with Tuesday's level."
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org.