Oil is at a three-week high (NYMEX:CLF14) just like that after Iran talks look like they are going nowhere and product demand surged against a back drop of some refining glitches. How quickly momentum shifts in the crazy world of oil. Today’s close will be critical for oil. While long-term we still target $88, but if we close above $95.50 we may try a retest of $97.00 area. For those that missed the first short, it could provide another great short. Still we have to asses today's action and see how the market trades if and when we get there.
Oil of course was led by products because of a surge in demand. RBOB (NYMEX:RBF14) led the way after a power outage at a Valero refinery in Texas City. This took the focus off of Ultra Low Sulfur and RBOB assumed the leadership role that the heating oil had earlier. Products are soaring as exports expectations are also raising because of refinery issues in Europe and a break down in the Iran nuclear talks. We still like the long side on products.
Ethanol markets also popped as the EPA easing of reg. mandates euphoria is wearing off. Cash markets are rocking and Argo and NYH markets have been soaring, going up as much as 50 cents a gallon in recent days. RIN prices are rising again.
Dow Jones is reporting that in Beijing, China oil pipeline explosions near a petrochemicals plant Friday left at least 22 people dead in China's eastern port city of Qingdao, according to local authorities and the official Xinhua News Agency. Xinhua reported that the first explosion occurred Friday morning in an industrial zone while workers were trying to fix the pipeline, which had begun leaking in the early hours of the morning. The pipeline, which is owned by a subsidiary of Sinopec Group, leaked into a municipal pipe network, causing the explosion, Xinhua said, citing emergency officials at the scene. Authorities said a separate explosion occurred at roughly the same time, after petroleum leaked into a nearby estuary.
Nat gas on the attack as the first withdrawal of the season was a whopper The Energy Information Administration reported that natural gas stockpiles fell by 45 billion cubic feet. Gas inventories fell 3.79 trillion cubic feet down 1.17%.