Hope that Greek bondholders will accept an offer that is just too good to refuse turned the commodity markets around on its ear. Markets that were acting quite toppy got a new lease on life as the odds were raising that indeed investors might go for a swap-o-rama. Throughout the day the market tried to ignore a very strong ADP Employment report and a mixed EIA petroleum report yet it was that old Greek hopium play that gave the commodity bulls a new life. According to Bloomberg News investors with about 60 percent of the Greek bonds eligible for the nation's debt swap have so far indicated they'll participate in what will be the biggest sovereign restructuring in history. Still it is not totally a done deal as the target of 70% participation has yet to be achieved.

The most interesting issuer with the EIA petroleum report was the drop in Gulf Coast supply of over 2 million barrels and the build in Oklahoma of two million barrels. The draw in the Gulf Coast was due mainly to fog in Houston. We should see a big build then next week. As far as Cushing goes, supply is rising as the market gets excited about the reversal of the Seaway pipeline.

 Iran risk premium also rose as the AP reported images of an Iranian military facility appear to show trucks and earth-moving vehicles at the site, indicating an attempted cleanup of radioactive traces possibly left by tests of a nuclear-weapon trigger, diplomats told American news agency on Wednesday. According to the Associated Press, the assertions from the diplomats could add to the growing international pressure on Iran over its nuclear program, which Tehran insists is for peaceful purposes. Two of the diplomats said the crews at the Parchin military site may be trying to erase evidence of tests of a small experimental neutron device used to set off a nuclear explosion. A third diplomat could not confirm that but said any attempt to trigger a so-called neutron initiator could only be in the context of trying to develop nuclear arms.

While the market gets giddy about Greece we have to keep an eye on Brazil. While Brazil did import a lot of ethanol from us, according to the Wall Street Journal this weakening data could be a warning sign. The Journal says this is a big concern amid the drag of the European debt crisis and a sluggish U.S. recovery. Brazil, China, Russia, India and South Africa are among the dynamic economies that helped the world bounce back from the 2008 financial crisis. This time around, they seem less likely to provide the same boost as they deal with problems such as strong currencies, inflation, deficits and real-estate bubbles. Earlier this week Brazil said its economy grew around 2.7% in 2011, less than half the rate the government predicted a year ago. And Wednesday, Brazil said industrial production fell 2.1% in January, the most since the 2008 crisis. Later, Brazil's central bank slashed its benchmark interest rate by three-quarters of a percentage point, a bigger cut than expected, to spur growth.

It is official for the year! The United States, according to the Department of Energy, in a special report for 2011 says we exported more petroleum products, on an annual basis, than we imported for the first time since 1949, but American refiners still imported large, although declining, amounts of crude oil, according to full-year trade data from EIA's Petroleum Supply Monthly February report. The increase in foreign purchases of distillate fuel contributed the most to the United States becoming a net exporter of petroleum products. U.S. petroleum product net exports (exports minus imports) averaged 0.44 million barrels per day (bbl/d) in 2011, with imports at a nine-year low of close to 2.4 million bbl/d and exports at a record high of nearly 2.9 million bbl/d. The gap between exports and imports widened the most during the second half of the year from August through December with total monthly exports topping 3 million bbl/d for the first time.

Strong global demand helped propel distillate exports, such as distillate fuel, which includes diesel, which had a higher profit margin for U.S. refiners than gasoline. Refiners also had access to increased supplies of crude oil and imports from Canada, which in 2011 topped 2 million bbl/d for the first time, and from North Dakota's Bakken formation to process into petroleum products. The United States remained a net importer of crude oil, some of which was refined into petroleum products that were then exported. Petroleum products were ranked second in value of all U.S. exports during 2011 at $111.1 billion, up 60% from 2010, according to U.S. Department of Commerce trade data. Vehicles were the number one U.S. export last year at $132.5 billion. Crude oil was the biggest U.S. import, valued at $331.6 billion, up 32% from 2010. Rising crude oil prices, rather than higher crude oil import volumes, were the key driver of the increased value of crude oil imports.

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