The petroleum market is trying to assess the impact from emerging issues in emerging markets and rising U.S. oil production ahead of Ben Bernanke's last Fed meeting and ahead of the President's State of the Union address. Oil (NYMEX:CLH14) is rebounding overnight as the market sees the rebound in the stock market as a sign that global central bankers can handle anything the emerging markets throw at them. As the Fed gets ready for another round of taper, emerging markets that fed off the Fed like a tape worm now have to deal with the withdrawal of hot money and have to deleverage.
Yet the rally seems to be on shaky ground. Oil products got hit hard as rising gasoline supply and weak demand because of weather will keep supply edging higher. As I told Bloomberg "We'll see another drop in distillate supplies due to the weather," said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. "There will be strong demand for heating oil." January is on track to be the coldest month of the century in the lower 48 states, according to Commodity Weather Group LLC. Demand for distillate rose 1.5% in the week ended Jan. 17 to 3.78 million barrels a day, the most since Dec. 20, the EIA said last week."
The petroleum industry will grit their teeth as President Obama will try to take credit for the U.S. shale revolution as they await what will be no doubt be more taxes on big oil and of course more regulation. The New York Times is wondering out loud why President Obama's approval ratings are so bad when the economic indicators show progress toward pre-recession health, but many forecasters are predicting what one called "a breakout year" for growth. A new study from a Federal Reserve economist even put a more benign spin on a negative trend, the shrinking labor force, by attributing the decline not to discouraged unemployed workers who have quit looking for jobs, but to the first baby-boomer retirements Well maybe because they believe the economy is not doing so good or maybe it's because they think the economy is getting better — not because of the President but in spite of him.
So against that backdrop he says he is going to give up on democracy and try to push more of his agenda through without Congress. It remind me of a line from the musical "Evita" when the Juan Peron character sings " It's annoying that we have to fight elections for our cause The inconvenience--having to get a majority. If normal methods of persuasion fail to win us applause, There are other ways of establishing authority."