The energy markets are still trying to balance strong U.S. jobs data versus rotten Chinese and Japanese data as well as the upcoming shoulder season. Geo-political risks have taken a back seat to economic concerns and ranges in seem to be shrinking.
The markets seemed to take for granted at this point that Putin’s takeover of Crimea will have little impact on supply when no one has the guts to challenge him in anyway. In Libya news was mixed with reports production had restarted at the El Sharara field versus the threat by the Libyan government to bomb a North Korean flagged tanker if it dared try to leave port. Libyan rebels have tried to cut their own oil deals leading to the possibility of another civil war in the country. Libya’s parliament vowed to use force to “liberate” all rebel-held ports. Yet the market is still woozy after China and Japanese data was abysmal offsetting the excitement over the better than expected jobs data.
Gas prices (NYMEX:NGJ14) are trying to come down but seasonal repairs are keeping RBOB elevated. Maintenance planned and unplanned is keeping many markets elevated. With Oil falling one would hope that we would see some relief at the pump. Prices hit a five month high as fear over Ukraine and corn prices kept a bid over ethanol. Maintence season is in high gear and the Midwest once again seems to be getting the brunt of issues. The Husky refinery in Ohio was down adding to the tightness created from BP Whiting and Citgo in Lamont.
The EIA, as reported by Dow Jones, showed the national average retail price of regular gasoline rose 3.3 cents to $3.512 a gallon in the week ended Monday, the U.S. Energy Information Administration said. The price is 19.8 cents less than the year-earlier level and is the highest price since the week ended Sept. 16. The price of retail diesel, on average, rose 0.5 cent to $4.021 a gallon, the EIA said. Prices hit the highest level since March 18 and were 6.7 cents less than a year earlier.
Winter comes back with a vengeance and Natural Gas looks like it may be setting up for another upside run. The focus on end of season storage is being seen as more critical especially because it seems that the winter heating season may never end.
Gold (COMEX:GCJ14) prices continue its rebound as risk premium and rising food costs may be giving gold new life. With the Fed on tap next week it seems all the reasons that gold investor’s dumped gold last year may be false. The sense that all the problems in Europe were solved and the great taper in the United States would lead to a sharply rebounding US dollar. Well forget about that. You only have to look to the rising Euro and shakiness in the emerging markets that are giving gold bear’s seller’s remorse. The wide divergence between gold and stocks did not make sense and with milk, coffee, meat and grain prices on the rise we know there is no inflation unless of course you have to eat or maybe drive a car or heat your home.