Petroleum (NYMEX:CLJ14) markets are pulling back as Russian troops are pulling back yet Putin says that the Ukraine is still in Chaos. While troops are pulling back Putin still suggests that sending more troops to the Ukraine is not out of the question but only in an extreme case.
Putin says he does not want to make Crimea part of Russia, which is really generous of him considering that no one in the world would lift a finger to stop him. At the same time fears are rising that this conflict may cause more harm to demand than supply. With Europe afraid to slap sanctions on Russia that include energy means that Putin’s grand adventure will just add more pain to the emerging market economies. The global economic recovery is waek enough and Putin and his ego may sink it. With Putin playing by his own rules we still have to expect the unexpected.
We will also get the American Petroleum Institute report. One focus will be distillate supply. Heating oil out performed on fears the crisis in Ukraine would increase US exports and decrease imports from Europe. Europe has sent supply of Distillate to help us meet demand during this wickedly cold weather.
Gold (COMEX:GCJ14) prices are also pulling back yet there are other reasons to be long gold other than the situation in the Ukraine. Gold surged to a 4-month high as traders once again found safe harbor in gold. Big inflow back into gold backed exchange traded funds is giving gold a more sold base. Still some physical buyers are waiting and watching to see if prices break before they get back in. Still the charts are very bullish so if they wait too long they may miss the run to $1,400.
Industrial metals are suffering as fears that a slowing economy in China will spread throughout the emerging markets reducing demand.
Natural gas is looking beyond the record breaking cold to the promise of warm temperatures in the future. Gold temperatures will hit the south and temperatures will be freezing temps unlike anything we have seen since 1880.