We start the New Year with the U.S. better supplied with oil than at any time in history. Now the market will focus on the demand side as we start the slow road back to normal markets after the extended holiday trade.
After surprisingly large draws in refined products in the API oil inventory report the market has turned the corner and has been trading higher since late yesterday afternoon. The market is in short covering rally ahead of today’s EIA oil inventory report.
The oil market continues to focus on Syria and the plethora of supply interruptions around the world, but the immediacy of Syria has eased over the last 24 hours. Currently market participants are now in a wait and see mode.
Oil bulls were living in a Fed paradise. Somehow up until the Fed meeting the market must have believed that Fed Chairman Ben Bernanke wasn't serious about that taper thing, but they found out that he was serious, very serious.