Oil rises to 6-week high on jobs, arctic blast

Winter Blast

An arctic blast is giving the energy sector support led by natural gas (NYMEX:NGF14) and heating oil. Crude oil (NYMEX:CLF14) hit a six-week high on exuberance over jobs, China and weather. Chinese exports are going wild and the southern leg of the Keystone Pipeline could help draw down supply in Oklahoma. In the Ukraine, they are tearing down a statue of Lennon and demanding that the government step down. The Ukraine turmoil could be impacted by Russia who already has threatened to cut off their gas supply if they don't join the new Russian trade group. Still it is weather that is the driving force in the complex.

In China, Bloomberg reported that crude imports rose 19% to 5.73 million barrels a day last month, climbing from the lowest level in 14 months, data from the Beijing-based General Administration of Customs showed yesterday. The boost in China crude imports helped give support to a market that was pricing in a slower China and Europe.

Fox News reports that in Kiev, Ukraine, angry anti-government protesters toppled a statue of former Soviet leader Vladimir Lenin in the center of Kiev on Sunday and blockaded key government buildings amid huge street protests, raising the stakes in an escalating standoff with President Viktor Yanukovych.

The biggest protest in the former Soviet Republic since Ukraine's pro-democracy Orange Revolution in 2004 led the government to fire back. It announced an investigation of opposition leaders for an alleged attempt to seize power and warned the demonstrators they could face criminal charges.

The West pressed for a peaceful settlement as hundreds of thousands of Ukrainians flooded the center of Kiev, the capital, to demand Yanukovych's ouster after he ditched ties with the EU in favor of Russia and sent police to break up an earlier protest in the nearly three-week standoff. "Ukraine is tired of Yanukovych. We need new rules. We need to completely change those in power," said protester Kostyantyn Meselyuk, 42. "Europe can help us."

Packing Independence Square as far as the eye could see, Ukrainians waving European Union flags sang the national anthem and shouted "Resignation!" and "Down with the Gang!" in a reference to Yanukovych's regime. "I am convinced that after these events, dictatorship will never survive in our country," world boxing champion and top opposition leader Vitali Klitschko told reporters. "People will not tolerate when they are beaten, when their mouths are shut, when their principles and values are ignored." As darkness fell, the conflict escalated further with protesters blockading key government buildings in Kiev with cars, barricades and tents. The protests have had an anti-Russian component because Russia had worked aggressively to derail the EU deal with threats of trade retaliation against Ukraine.

In a must read in the Financial Times they say "The U.S. chemicals industry is planning a sharp increase in its exports as a result of the cost advantage created by the shale gas boom, putting pressure on higher-cost competitors in Europe and Asia. The American Chemistry Council, the industry association, predicts in forecasts published this week that US chemicals exports will rise 45% over the next five years, as a result of a wave of investment in new capacity that will be aiming at overseas markets.

The U.S. has already shifted from being a net importer of chemicals in 2011 to forecast net exports of about $2.7bn this year, and the ACC expects that to rise to almost $30bn by 2018. Excluding a deficit of about $40bn in pharmaceuticals, that would represent a record surplus of about $68bn in five years. Check it out in the FT.

About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.


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