The petroleum market will be obsessed with thawing relations and thawing turkeys. The ultra-low sulfur diesel led a comeback in energy in the aftermath of skepticism surrounding the surprise deal with Iran.
The Jan Brent/WTI spread has been mostly in a narrowing mode this week as the market seems to be more focused on what could be an improvement in some of the lingering international supply issues rather than focused on the growing surplus of oil in the U.S.
Gunmen yesterday seized Libyan Prime Minister Ali Zeidan from a hotel in central Tripoli, releasing him shortly afterwards, but making it clear that post-Gaddafi Libya is a failed state and that the government is incapable of taking full control over its oilfields and export terminals.
Oil and products did a supply slide as disruption in supply all around the globe seemed to come online all at one time. In Libya, South Sudan, Nigeria and Iraq supply that was slowed or halted is coming back online.
Yesterday marked the fifth anniversary of TransCanada's application to the U.S. State Department for the 1,700-mile pipeline from Alberta to Texas known as the Keystone pipeline, the most famous pipeline in America even though it has not been built.
The November Brent/WTI spread has continued to narrow declining for the last two sessions in a row. As the supply issues that I have been discussing for weeks start to resolve themselves the spread will resume its path toward parity.
Global petroleum markets continue to price in the odds of war and peace. Tough negotiations between the U.S. and Russia continue in Geneva as they seek a way to avoid war and to rid Syria of those nasty chemical weapons.