Dare to Be Flat
Iran admitted they are enriching uranium at its underground nuclear enrichment Fordow site and imposed the death sentence on U.S. man they accuse of spying and oil closes...flat? Oil prices yesterday failed to make significant gains despite some disturbing revelations coming out of Iran perhaps because the markets were less than impressed with the meeting between German Chancellor Angela Merkel and French President Nicholas Sarkozy. While Iran has played a major role in keeping oil prices elevated, it does not seem that Iran is enough to keep the oil market on fire. Oil needs other news to keep the bullish move going, especially out of Europe and China.
Early on today we did get some. This morning we saw a report that French industrial production climbed 1.1% in November that MarketWatch said was lifted by production of electronics and refinery output. Angela Merkel also tried to say that there was progress made in the European situation.
The Financial Times reported "Negotiations on a new European treaty to reinforce budget discipline in the Eurozone are making rapid progress and there is ‘a good chance’ of reaching agreement by the end of January, according to Angela Merkel, Germany's chancellor. Her confidence was mirrored by Nicolas Sarkozy, French president, speaking after a bilateral Franco-German summit in Berlin on Monday. He said the new treaty, including a requirement for all 17 Eurozone members to agree to constitutional amendments to balance their budgets, should be signed by March 1.”
Today Dow Jones says that “A cautiously optimistic tone prevailed in European trading hours Tuesday, helping the euro and commodity-linked currencies of Australia and Canada make small gains against the dollar ahead of a key meeting scheduled for later in the day between German Chancellor Angela Merkel and International Monetary Fund Managing Director Christine Lagarde.”
Market Watch reported that "China's trade surplus yawned wider in December, beating expectations as exports shot higher. December exports rose 13.4% compared to a year earlier, the General Administration of Customs said Tuesday, with the result above a 12.5% median forecast reported in a Dow Jones Newswires survey. Exports had risen 13.8% in November. Imports rose 11.8%, below a forecast 18% and cooling sharply from November's 22.1% increase. This resulted in a $16.52 billion surplus for December, which Dow Jones Newswires said compared to expectations for a $7.8 billion. November's surplus amounted to $14.5 billion."
Also Dow Jones is reporting that some oil buyers are asking for more Saudi grades after recent price cuts. Even China that says they don't think punishing Iran for nuclear ambitions should be tied to the oil exports, yet they say that they may seek more Saudi Arabian crude oil to make up for lower Iranian supply . Dow Jones says at this time that Japanese and Korean refiners are not seeking any extra barrels yet to replace Iranian oil.
The products got a boost on a report from Barbara Powell who said that Motiva Enterprises in Port Arthur, Texas shut a diesel hydrotreater for repairs and will idle a crude unit Jan. 17 and a coker March 1 for work quoting two people with knowledge of the operations. Powel says that the hydrotreater will be down for about 24 days and the 75,000-barrel-a-day crude unit for about 17 days, said the people, who declined to be identified because they aren't authorized to speak for the refinery.
Maybe it wasn't that cold after all. At first when I saw orange juice go limit up I thought the recent cold snap damaged some crops. Yet in further review the truth may be something different. The AP reported "The U.S. Food and Drug Administration says it will step up testing for a fungicide that has been found in low levels in orange juice. FDA officials said they are not concerned about the safety of the juice but will increase testing to make sure the contamination is not a problem. In a letter to the juice industry Monday, the agency said that an unnamed juice company contacted FDA in late December and said it had detected low levels of the fungicide carbendazim in the company's own orange juice and also in its competitors' juice. Fungicides are used to control fungi or fungal spores in agriculture. Carbendazim is not currently approved for use on citrus in the United States, but is used in Brazil, which exports orange juice to the United States. An FDA spokeswoman said the company's testing found levels up to 35 parts per billion of the fungicide, far below the European Union's maximum residue level of 200 parts per billion. The United States has not established a maximum residue level for carbendazim in oranges.”
In the letter to the Juice Products Association, FDA official Nega Beru said the agency will begin testing shipments of orange juice at the border and will detain any that contain traces of the chemical. Because it is not approved for use in the United States, any amount found in food is illegal.
Beru said that because the FDA does not believe the levels of residue are harmful, the agency will not remove any juice currently on store shelves. But he asked the industry to ensure that suppliers in Brazil and elsewhere stop using the fungicide. "If the agency identifies orange juice with carbendazim at levels that present a public health risk, it will alert the public and take the necessary action to ensure that the product is removed from the market," he said.
The discovery comes after the agency said it would also step up testing for arsenic in apple juice. FDA officials said last year that the agency is considering tightening restrictions for the levels of arsenic allowed in the juice after consumer groups pushed the agency to crack down on the contaminant.
Studies show that apple juice has generally low levels of arsenic, and the government says it is safe to drink. But consumer advocates say the FDA is allowing too much of the chemical — which is sometimes natural, sometimes man-made — into apple juices favored by thirsty kids.
Patty Lovera of the consumer group Food and Water Watch said the federal government needs to rely on its own testing, not that of the companies. "The federal government needs to set consistent, meaningful, enforceable standards for all toxins," she said.
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 email@example.com.