Oil rises as Ramadi falls as this markets price action continues to defy the calls for an oil price crash. ISIS forced Iraqi security forces to flee the largest province in Iraq despite help from U.S. air support.
For the most part, the price discovery in energies was muted by mixed data. The soft Euro Zone and Chinese data was joined by worse than expected U.S. retail sales, putting a negative spin on demand side pressure. This affect was offset in the energies by unexpected draws in the EIA report in WTI, gasoline and distillates.
The drawdown in Energy Information Administration (EIA) inventories yesterday further fueled the strong WTI contract to better than $62 before the sliding equity markets and the weak dollar pulled it back down.
Retail gasoline prices have hit their high for the year, but the news is not all bad. Despite the fact that AAA says prices have risen 17 cents a gallon, hitting $265 per gallon, prices are a lot lower than a year ago--and taking into consideration the fact that crude oil prices have soared, it could have been a lot worse.
It was another quiet over night session with little data out of the Far East and Europe. Better than expected German IFO data did provide a slight demand bid but it appears any real action will have to wait for today`s U.S. durable goods data.