Crude prices floated in the mid $70.00 to $80.00 dollar range during the past two weeks, influenced initially by encouraging news of Chinese economic recovery and a related weakened U.S. dollar, and laterally by the market's disappointment concerning the subsequent imposition of inflationary controls in China which, in turn, strengthened the U.S. currency.

Supply and demand fundamentals were largely ignored by the market as inventories remained adequate and demand continued to resist any government sponsored economic stimulus to date. A favourable DOE report and market concern over the potential for the introduction of new U.S. legislation designed to curtail excessive speculation in the crude futures market also served to dampen trade values in the latter part of the period.

Refined product prices were more sensitive to market fundamentals with gasoline being bid up earlier in the week by increased demand from Brazil and subsequently falling later in the week as the DOE reported inventory builds in light of reduced domestic North American demand.

Refinery yield: 77.8% 
Demand: see below

• U.S. airline passenger revenue declined a record 18% in 2009 while December marked the 14th month of year-on-year declines, the Air Transport Association of America said Wednesday.
• The DOE reported on Wednesday that demand for gasoline fell 0.8% over the four weeks ended January 22 compared with a year ago, and that the demand for heating oil and diesel is off 8.1%.
• Demand for gasoline from Brazil increased dramatically recently in reaction to a reduction in ethanol production in that country. A recent spike in global sugar prices has caused local farmers to divert sugarcane from ethanol production which typically fuels a significant portion of that country's motor transportation. Several cargoes of finished gasoline initially bound for NYHBR were bought up by Petrobas, the Brazilian national oil company.

• China's economy expanded 10.7% in the December quarter and by 8.7% for the whole of 2009.
• President Obama this past week proposed tougher bank regulations which may see less hot money flowing into commodities markets including crude futures. Goldman Sachs and other major banks have helped funnel billions of dollars of speculative money into oil and natural gas contracts during the past several years.

• Hess Oil announced plans to begin maintenance activity on its 70,000 bpd refinery in New Jersey in early April. Korea National Oil indicated that its 115,000 bpd refinery in Come By Chance, Newfoundland, should resume full capacity early next month after having been cut back to 65% utilization following a fire earlier this month.