Morning Market Overview

In the pre-oil inventory release cycle oil prices were strongly higher across the board. Positive economic data in the US and Europe along with ongoing protests in Iran were the main catalysts propelling prices higher. The protests in Iran are now in their sixth day with 21 people dead.

Currently it does not look like the protests will end in the short term. However, there is still no sign that the protests have bubbled over into the oil producing/exporting areas of the country and as such there is no indication that oil flow out of Iran is in jeopardy. Crude oil prices are trading at levels not seen for three years with both WTI and Brent solidly above the $60/bbl level.

Refined products were also very strong on Wednesday on a combination of lingering artic cold temperatures along the US East Coast coupled with unplanned refinery glitches in the US Gulf Coast area. As we have been discussing for months as inventories continue to destock all unplanned interruptions in oil flow will be met with upside price movement.

In addition, as inventories get closer to normal even the potential for an interruption (like in Iran) will result in upside price movement.