The Baiji refinery falls along with oil.
Oil prices (NYMEX:CLN14) pull back as traders pull back from their worst case scenarios and focus on the fact that oil exports from Iraq's southern ports are near record highs. Yet The Baiji refinery, Iraq's largest and one that produces a third of Iraq's oil and product output reportedly has fallen back under control ISIL (Islamic State in Iraq and the Levant.)
Yet with oil exports from southern Iraq are rocking. Reuters reports that exports from Iraq's southern terminals averaged 2.53 million barrels per day (bpd) up to June 21, according to shipping data and Reuters sources, even as Sunni Islamist insurgents captured swathes of territory in northwest and central Iraq. This compared with May's average of 2.58 million bpd--the highest since 2003. Total exports from the country's northern and southern ports hit a record high of 2.8 million bpd in February. John Kerry is in Kurdistan saying Iraq faces a new reality and is asking the Kurds to be part of the political process and raising pressure on Iraqi Prime Minister Nouri al-Maliki to step down.
Traders may be focusing on the fact that Russian President Vladimir Putin has asked to Russian parliament to rescind his request for military force in the Ukraine. Fox News reported insurgents in eastern Ukraine promised to honor a cease-fire declared by the Ukrainian president and engage in more talks to help resolve the conflict. Gazprom says gas flows to Europe are normal and the possibility that a cease fire may lead to a longer term agreement on a gas deal with Ukraine. The Moscow News agency reported that Naftogaz chief executive Andriy Kobolev says Ukraine is ready for talks and plans to propose a new, trilateral, stage of negotiations with participation of the European Commission.
Natural gas (NYMEX:NGN14) pulled back as the market is looking to add to its string of triple digit injections. The heat has been milder than expected and the market is fearful of a big injection later this week.
The gold (COMEX:GCN14) market is hanging in as the EU may move to QE. Gold hit the highest level in 10 weeks as the U.S. Dollar Index (NYBOT:DXN14) falls and geo=political risk brought investors back to the metal. The SPDR Gold Trust, the world's top gold-backed exchange-traded fund, notching a 2.4 ton increase in holdings to 785.02 tons on Monday according to Reuters. Strong Chinese data is improving Chinese demand expectations for the yellow metal. It also pushed copper up to a three-week high.