We are in a waiting pattern until the numbers are released. The conditions that brought us to these levels remain, so we may resume our move higher once the report is digested.
Last year began with a large surplus but an unusually hot summer ate up those reserves and soon thereafter the hurricanes hit. There is still some infrastructure that was damaged, which could be a problem.
Prices have retreated unusually fast and there is still two months left for the thermometer to drop.
The real dichotomy in this market is that crude inventories are very high and that could make for some violent, back-and-forth price action. For the foreseeable future, the path of least resistance remains up until there is a significant structural economic or political shift.
We are starting to see a change in consumer behavior. Consumers are cutting back because of high prices, rising interest rates and signs that the housing bubble is ending. Prices have probably begun the long steady process of grinding lower.
The UN-Iran conflict will recede a bit in coming sessions since the UN won't look back into the situation for 30 days. Iran now has 30 days to posture, it can issue some harsh words and in the end negotiate better terms when the deadline approaches.
Once it gets back over the warm water of the Gulf it can gain strength and change direction. It doesn't look like it is headed for the big facilities in the Gulf, but we won't know for sure until the weekend when we can't do anything.
At this time of year, it is hard to imagine prices running to far away, particularly with the huge amount stored.
If the stock market were not making five- and six-year highs, Iran and the U.S. were fast friends and the Nigerian militants were stuffing flowers in the gun muzzles of the Nigerian army -- then we might be worried about a reversal, but not now.
The warm January has permitted a window of opportunity to stage an early refinery turnover, longer-term weather forecasts call for a warm conclusion to the heating season, and gasoline has been quickly rebuilding stockpiles in advance of summer.
Mild weather is supposed to continue across most of the northern third of the country until next week, .
The weekly inventory numbers caught the market by surprise again. The unanimous UN decision demanding Iran stop nuclear enrichment probably rekindled concern that Iran will use oil as a political weapon.