Signed, sealed but not delivered? The Russian Ukraine dispute was still being dragged out all weekend despite the fact that supposedly a deal was reached between the two parities. The EU and the Ukraine thought they had deal but as of now the gas is still not flowing. Why not? Well it is all in the details you see.

Despite a supposed agreement by all parties Gazprom said it was waiting to receive a faxed copy of the monitoring agreement signed by Ukraine. As people are freezing in the dead of winter because of this gas dispute, paranoid Russians said it wanted to check that the document was identical to the one signed by Russia and had not been amended. The EU was furious that the Russians continued to delay supply even though the deal is signed, sealed but the gas has not been delivered as they wait for Russia to make sure again that the t's are crossed and i's dotted. Dow Jones reported that Moscow reneged on the deal and voiced objections to a Ukrainian demand that it be permitted to take Russian gas en route to Europe for technical purposes.

The mixed signals go on. Gazprom's Chief Executive Alexei Miller said he expects gas exports to begin in hours. Yet at the same time Prime Minister Vladimir Putin said on Monday a deal on gas transit monitoring still had to be signed by the European Commission before Russia would resume delivery. This comes after a day when President Dmitry Medvedev showed some moxie by criticizing Putin for slowing down an economic stimulus plan. The truth is that Russia's handling of this gas crisis is a sign that they have much larger problems at home and they are trying to deflect attention away from their struggling economy. The market seems to think that the gas will flow soon.

The gas conflict in Europe is one of the reasons that Brent crude is trading at a premium to WTI. Yet it is also the effect of the large contango and the amount of oil that is being stored in Cushing, Oklahoma. The Wall street Journal quoted my old buddy at Platts, Linda Rafield, as saying that the maximum storage capacity in Cushing is about 42.4 million barrels, but only about 80%, or roughly 34 million barrels, of that is operable storage space. With 32.182 million barrels now sitting in Cushing, the market appears poised to test the limits of storage capacity there. My other buddy John Kingston wrote that as long as storage is available at Cushing -- and given the steep rise in inventories reported by the Energy Information Administration last week storage clearly has been available -- excess oil will go to where it is easiest to take advantage of the contango structure in the market. The eye-popping contango of almost $13/b between February and August WTI is a direct result of the overhang of oil on the market and the fact that there was available storage at least through last week brought the world's excess oil overhang.

The bottom line is that we have a glut of crude globally. The brent crude may fall after the EU situation is handled. Oil bulls have to ask themselves where the demand is going to come from. A major cold blast may be supportive but at the end of the day there is plenty of supply. Remember bearish is as bearish does and the market is still acting bearish. What is cheap can get cheaper so you should not buy oil just because you think it is cheap. There are more challenges ahead.

Do you want a long term bearish story perhaps? Dow Jones reported that Toyota Motor Corp. announced it plans to launch an electric vehicle by 2012 and offer 10 new gas-electric hybrid models in the early 2010s. Imagine that, an all electric car. We better get going on that smart grid.

It is time for you to get smart by watching the Fox business Network where you can see me every day. And it is a great time to open up your account. Just call Phil Flynn at 800-935-6487 or email me at

Still short crude after all these months! We're short February crude on the triple rollover from apprx 4461 - stop 5100!!!

We're long February heating oil from apprx 14900 - stop 14400.

We're short February RBOB from apprx 12000 - lower stop to 11400!!

Stopped on long February natural gas from apprx 550 at apprx 560! Buy February natural gas at 520 - stop 490.

Have a GREAT day!