Yesterday’s trade made an impressive rebound off the early-morning lows and closed near the high of the day. The
intraday chart of the market appeared to be a mirror image of the stock market, which traded most intently on
testimony from Fed Chairman Bernanke. In his testimony, the Fed chairman reassured that rates would remain low
for an “extended period.” Those words were recently defined by Fed Pres Bullard as meaning at least six months,
and have kept risk markets supported. Also boosting prices yesterday was the 543 kb/d increase in gasoline
demand. The four week average gained 111 kb/d and compares to a five-year average for the week of just 42 kb/d.
Given the market’s hyper-sensitivity to increases in demand, prices understandably traded sharply higher on the
news even though total demand fell to 1.64 mb/d below the five-year average compared to 1.56 mb/d below it the
previous week.
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