Moratorium show down! Well I did call Obama the Great Misleader and now I have a judge that agrees with me. Federal Judge Martin L.C. Feldman issued an injunction against the Obama administration lifting its drilling moratorium saying the government never justified the ban and appeared to mislead the public. Oil prices fell back across the curve falling 15-30 cents a barrel right after the announcement.

Judge Martin L.C. Feldman as reported by the Washington Times issued an injunction, saying that the moratorium on drilling will hurt drilling-rig operators and suppliers and that the government has not proved an outright ban is needed, rather than a more limited moratorium. He also said the Interior Department also misstated the opinion of the experts it consulted. (Misstated?)In fact the truth is that those experts from the National Academy of Engineering said they don't support the blanket ban. Much to the government's discomfort and this Court's uneasiness, the summary also states, 'the recommendations contained in this report have been peer-reviewed by seven experts identified by the National Academy of Engineering.'

As the plaintiffs, and the experts themselves, pointedly observe, this statement was misleading, Judge Feldman said in his 22-page ruling.It is clear that the Obama administration is playing fast and loose with the facts in an effort to placate its angry environmental base and to cover up for their mismanagement of the situation in the gulf. In the mean time he is putting people out of work using false information and instead of creating jobs, he is destroying them.

Yet the market did not break more because the Obama administration is going to appeal the ruling and the market knows that they will not give up easy especially when their political backside is on the line. The AP is reporting that Interior Secretary Ken Salazar will issue a new order imposing a moratorium on deepwater drilling. Salazar said that the new order will contain additional information making clear why the six-month drilling pause was necessary in the wake of the Gulf oil spill. 

Salazar says he will point to indications of inadequate safety precautions by industry on deepwater wells. He said he would issue a new order in the coming days showing that a moratorium is needed. But first he has to find a new set of experts. You know the type, the ones that agree with him.Good thing it is not winter because if it were, then we may have seen oil flying high on the latest gas dispute between Russia and Belarus.

Bloomberg News reported, Belarus President Aleksandr Lukashenko threatened to halt gas transit to Europe and accused OAO Gazprom of starting a gas war, after the Russian export monopoly for the fuel cut supplies to the country by 30 percent. Lukashenko demanded Gazprom pay more about $260 million in transit fees during a meeting with Russian Foreign Minister Sergei Lavrov today shown on Belarus state television. Gazprom is demanding $192 million from Belarus for past deliveries, lowering supplies today from a 15 percent cut yesterday. Russia, which supplies a quarter of Europe's gas via Belarus and Ukraine, threatened to cut supplies to Belarus in January 2007, averted by a last-minute accord that more than doubled its neighbor's gas price.

Gazprom also halted flows to Ukraine, disrupting deliveries to Europe during freezing weather in 2006 and 2009 and raising concerns it was using energy as a tool against Ukraine's then pro-European government. In the past these disputes drove oil substantially higher, yet because it is summer and there is an excess supply of oil in the world the treat only gave oil a momentary boost.

The market's focus today will be the Fed and the Energy Information Agency weekly supply report. Last night the American Petroleum Institute gave us a bearish report by reporting an increase of crude stocks to the tune of 3.7 million barrels. The API also showed that distillate stocks increased by 1.1 million barrels and gas sticks up by 1.3 million barrels. On the demand side the MasterCard Spending Pulse report showed that gasoline demand rose for a second consecutive week as prices at the pump remained at a 14 week low. Bloomberg says that motorists bought an average 9.311 million barrels of fuel a day in the week ended June 18, the second-biggest payments network company said today in its SpendingPulse report.

The average pump price for regular gasoline was unchanged at $2.70 a gallon, the lowest since March 5. Demand is increasing as the July 4 holiday, traditionally a peak demand period of the summer driving season, nears. The 0.4 percent gain last week, however, was less than the 1.4 percent increase the prior week. The energy complex is still following the stocks. The Fed is not expected to do much of anything so oil should still stay in this recent trading range. One thing that could knock us out of that range would be a hurricane.

Today's tropical wave watch show that the likelihood that the recent storm in the Atlantic will become a cyclone has fallen to 20%. It looks like we dodged another bullet but the Atlantic weather watch will go on. Make sure you are getting all the latest news by watching the Fox business Network where you can see me every day! Make sure you are getting our daily buy and sell points for all the energies. We also can give position trades and options. The trades will be free for a limited time so make sure you take advantage of them while you can. Just call me at 800-935-6487 or email me at pflynn@pfgbest.com     

 

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