Get ready for a preemptive strike from Iran. No not in the Straits of Hormuz but a strike in a different sense of the word. Iran is looking to possibly cut off oil supply to Europe before Europe can prepare to make up for the lost oil. It going to be a long weekend as the Iranian parliament on Sunday is going to debate a plan to stop oil exports to counties that dare to even consider to not buy there oil.

Are you nostalgic? Remember those good old days when Inflation was all the rage? Do you miss the seventies? Do you still have your Wip Inflation Now button? Well it seems Ben Bernanke misses Inflation and say that some in Inflation isn't a bad thing well at least within reason. So says Fed Chairman BEN Bernanke. Mr. Bernanke and his merry band of fed governors cheered commodity bulls yesterday by declaring that because of low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. In fact it seems that Mr. Bernanke is actually longing for inflation. Federal Reserve Chairman Ben Bernanke said that the Fed would accept higher inflation if the unemployment rate remains high. The Fed is also offering the olive branch and the promise of QE3d Very Bullish for oil. The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability. Yahoo.

Barbara Powell at Bloomberg writes Gasoline rose to the highest level since October on speculation that refinery closures and unit shutdowns will reduce inventories of the motor fuel on the U.S. East Coast. Futures rose as Hess Corp. said today it may shut the fluid catalytic cracker at its gasoline-making Port Reading refinery in New Jersey for repairs. Two Pennsylvania refineries have shut, as well as a refinery in the Virgin Islands that serves the Eastern U.S. Gasoline for February delivery rose 4.65 cents, or 1.7 percent, to $2.8515 a gallon at 11:17 a.m. on the New York Mercantile Exchange. Prices touched $2.8556, the highest intraday level since Oct. 17. Hess said yesterday that the catalytic cracker, which makes gasoline for the New York area, is malfunctioning. Hess will continue to operate Port Reading as long as it generates acceptable financial returns, Jay Wilson, vice president of investor relations in New York, said in an interview yesterday. The Energy Department reported today that U.S. refineries operated at 82.2 percent last week, an eight-month low. Gasoline production was reduced by 2.8 percent to 8.54 million barrels a day, the lowest level since February 2010. New York Harbor is the delivery point for reformulated gasoline blendstock, or RBOB, and heating oil futures on the New York Mercantile Exchange. That region is already facing potential supply tightness after the shutdown of two Pennsylvania refineries by Sunoco Inc. and ConocoPhillips. Hovensa LLC, a partnership of Hess Corp. and Petroleos de Venezuela SA, said on Jan. 18 it will shut the 350,000-barrel-a- day St. Croix refinery in the U.S. Virgin Islands by mid- February because the plant is losing money. That refinery supplies products to the U.S. East Coast. Heating oil rose as distillate inventories declined 1.7 percent last week to 145.5 million barrels, according to department data. It was the largest loss since the week ended Nov. 4.

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