Crude futures boldly went where no crude futures had gone before today, closing at $86.13 per barrel. Black gold continued to garner momentum from supply concerns due to risks to production in the Middle East and declines in U.S. crude inventories. According to news reports, Turkey moved a step closer to a possible incursion into northern Iraq as the government drew up a motion seeking parliament's approval for military action against Kurd rebel bases there. Those Kurd rebel bases are near large crude pipelines. This new concern helped to push reformulated gasoline prices higher as well. Phil Flynn at Alaron Trading told MarketWatch that the surging price seems to have created a wait-and-see-to-buy attitude by refiners, wondering if they are paying too much.
In addition, the week's inventory numbers due on Wednesday have started to weigh on traders. The concern is that colder temperatures will continue and an influx of Americans using heating oil will push supplies lower, and prices higher. Furthermore, John Person at NationalFutures.com suggested that unseasonably warmer weather throughout most of the upper Midwest through the north east has led to increased demand for gasoline at a time when refineries are focusing production on heating oil is a concern and is helping to support prices. In fact, Flynn noted that China is becoming startled at the higher crude prices.