OilPrice.com Weekly Oil Market Update: 03/1/2010 - 03/5/2010

Jobs data indicating that U.S. economic recovery might be picking up steam finally pushed crude oil futures decisively over the stubborn $80 a barrel threshold. Nymex’s benchmark West Texas Intermediate settled Friday at $81.50 a barrel, a seven-week high, after topping $82 in intraday trading. An unchanged unemployment rate of 9.7% and a smaller-than-expected drop in payrolls propelled both stocks and commodities higher on Friday. Earlier in the week, industry job data also came out better than expected, pushing crude just above the $80 a barrel mark. Any improvement in the labor market would translate into more commuter driving, more vacation driving this summer and generally greater energy demand, analysts said.

When Storming The Bastille Is Not An Option, The Parliament Will Do

Greek taxpayers are not happy, and in this clip from Bloomberg, they make it painfully obvious. With parliament now having officially passing austerity measures, the question remains: will strikes and demonstrations persist, or will the Greeks tire out and go back to their old, and much poorer, ways. Alternatively, with the ruling PASOK party now certain to plummet in popularity, what would happen if the ND is voted back in ahead of time? They already made it clear that austerity is not an option. And with all of European posturing focused on what Greece promises to do, should those promises be recanted, what then?

The Primary Source Of January's Surprising Boost To Consumer Credit? Why, The US Government Of Course

Today, the market spiked in the last hour of trading after it was announced that total consumer credit increased for the first time in a year (not all credit, mind you, just car loans; consumers are still eagerly paying down their credit cards). And who was the source for this generosity you may ask? Why, the US Government of course. Not only that, but Non-Seasonally Adjusted Consumer credit was actually down by $4 billion. But let the government have its smoothing fun. On a non-seasonally adjusted basis, consumer credit has declined by $108 billion in the past 12 months. What may be surprising, is that were one to strip away the contribution from the Federal Government of $78 billion, the decline would have been almost double, or $187 billion. Furthermore, in January, NSA consumer credit would have declined by $14 billion had it not been for the... wait for it... Federal Government, which sourced $10.4 billion in new consumer credit. So here is what happens in case you haven't figured it out already: the government takes taxpayer money, and lends it out to all sorts of destitutes at zero % interest, who have to keep up with the Joneses at all costs, and even though can not afford to put down any equity, must buy a new car every 6 months (even though they have likely not made a mortgage payment in about a year... not to worry, Uncle Sam is footing that too via the Federal Reserve and Fannie and Freddie), and when the news of the government's generosity hits the market, and the spin is that Americans are again confidentenough to borrow, the few SPARC machines left trading do whatever Liberty 33 tells them to, and bump up the total capitalization of the market by about $20 billion, putting money straight into the pockets of Goldman Sachs and other recent bailoutees, who without doubt deserved a $70 billion bonus season in 2009. And now you know where your money goes to.

Net Euro Speculative Short Positions Decline Marginally From Record, Yen Longs Surge

According to the CFTC's Commitment of Traders report, non-commercial speculative shorts in the Euro declined for the week ended March 2, and for the first time in over two months, tracking the move of the EUR higher over the past week. Total net positions declined from -71,623 to -66,770, or a net long increase of 4,853. This is still the second highest net short exposure in over two years.

On the other side, a stunning push in Yen long exposure increased the net long Yen positions from 1,717 in the prior week to a whopping 32,552. The next question: will Japan promptly ask all these speculators to performSeppuku after they have done all they can to make the Yen more expensive, thus laying Japan's best laid plans to stimulate inflation to waste.

The third most relevant currency, the British Pound, saw a net short increase, with net short Non-commercial contracts increasing from -64,647 to -67,549.

Non-Revolving Credit Rises By $7 Billion As Revolving Credit Dips Yet Again

The January G.19 statement is out, and confirms that consumers are buying ever more cars on credit, as if we didn't know this. Non-revolving credit, which is basically comprised of car loans increased by about $7 billion to $1.592 trillion, even as revolving credit continued declining, hitting $864 billion, down from $866 billion. Obviously, the market, which the last time the G.19 was released bounced, regardless that credit then declined by $4 billion is now bouncing again, not really sure why, but just tagging along with the computers. And the computers may very well be right: with the government soon expected to foot all consumer credit card losses in addition to GSE and financial firm toxic asset losses, why not just max it all out, after all mortgage payments are now about 6 months in arrears and nobody from the lender bank gives a rat's ass. Out of sight is out of balance sheet impairments. Credit is back, baby. And not like anyone will ever ask you to repay it.

Sovereign CDS Ban On Deck; Next Up: Any EURXXX Short Recommendation To Land You Straight In Jail

“We must succeed at putting a stop to the speculators’ game with sovereign states. We can’t allow speculators to be the profiteers of Greece’s difficult situation. Derivatives must be curbed.” - Angela Merkel

Barney Frank Backtracks On GSE Statement, Realizes Put Foot In Mouth Yet Again

“To reiterate, I continue to think that it would be a mistake for Congress to take action that formally conferred on Fannie and Freddie debt the legal status of debt issued by the Treasury. But nothing in that position prevents Treasury from acting as it thinks best with regard to its obligation to provide stability to the housing market and the financial system.” - Barney Frank, Post Appendage In Mouth