Once again the commodities can't wait for the Fourth of July to provide us with fireworks! Oil had its biggest up move in years as hope for a Euro zone solution and short covering as we get ready to start the second half of the year. Who wanted to be short into a weekend where it was apparent the Spanish and Italian banks were not going to fail. Add to that the beginning of the European sanctions and the Iranian oil embargo driving provocative comments from Iranian Admiral Al Fadavi as saying that, The Strait of Hormuz and the rest of the Persian Gulf is an Iranian playground and no one else.

Another reason not to be short going into the holiday week was the ongoing strike in Norway. Dow Jones reported that talks between the parties in the Norwegian oil strike over the weekend haven't resulted in a solution of the conflict, according to the Norwegian Oil Industry.

The China manufacturing data, according to Bloomberg News, performed better than economists had predicted. The government's PMI fell to 50.2 in June from 50.4 in May, the National Bureau of Statistics and China Federation of Logistics and Purchasing reported in Beijing yesterday. That beat the 49.9 median estimate in a survey of 24 economists.

Yes while this might give the market a short term boost the longer term outlook for Chinese gas demand is changing. According to Reuters China's booming southern city of Guangzhou is limiting the number of new cars on the streets to ease traffic jams and cut pollution, state media said on Sunday, a move that could weigh on sales in the world's largest car market. Guangzhou, the capital city of Guangdong -- the factory workshop of China and the world -- will only allow 120,000 new cars to be registered over a one-year trial period, or 10,000 cars a month, the official Xinhua news agency said. The measure, effective Sunday, puts Guangzhou as the third Chinese city after Beijing and Guiyang to limit car sales in an attempt to improve traffic conditions and air quality. Beijing started capping new car ownership at 20,000 a month in January last year to tackle the city's chronic traffic gridlock. The move slowed the pace of traffic congestion, and was cited as a drag on China's falling car sales. China's once red-hot car market is slowing under the weight of a cooling economy, among other factors. It is expected to grow in a single digit in 2012 for a second year in a row, the slowest back-to-back years since its take-off in the late 1990s. The average travelling speed of a car during peak hours in Guangzhou has slowed to 20 kilometers per hour, and is expected to slow further, Xinhua said. Xian Weixiong, a traffic regulator in Guangzhou, was quoted as saying on the Guangzhou government's website that soaring car ownership has worsened traffic conditions. Guangzhou now has 2.4 million cars, the website said.

Tropic storm Debby should have slowed imports last week. Look for crude to be down 2.5 million barrels gas down 2 million barrels, distillate down 2 million and refinery runs down 0.5.

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Phil Flynn