Crude prices continued their steady climb in the early part of the past two weeks buoyed by indications that recessionary conditions seemed to be improving. A subsequent report presented by the World Bank, however, painted a more bleak picture of global economic conditions resulting in a pull back from the $70.00 per barrel plateau. Fluctuations in the U.S. dollar, geo-political tension in Nigeria and Iran and reduced inventory levels as reported by the DOE impacted crudes prices for the remainder of the period. Gasoline prices moderated over the period as reduced demand coupled with improved domestic refinery production resulted in increased inventories. Distillate prices continued to be pressured by the contango like market whereby higher futures prices made the building of speculative inventories economically viable. Gasoline spot market prices spiked on Monday in reaction to prompt buying interest ahead of the July 4 weekend. Although adequate supply is available, the recent contango distillate market has encouraged the build-up of heating oil inventories at the expense of traditional gasoline inventory levels, causing at times temporary spot market price spikes.

• The International Energy Agency announced on Monday that in 2009 global oil consumption will fall for a second straight year, the first time oil demand has fallen for two consecutive years since 1982-1983. The IEA reported that recessionary impact, combined with signs of a structural shift to less intensive long term oil use, were the underlying reasons for its cut of at least three million barrels a day to its oil demand forecasts for the coming five years.
• The American Automobile Association predicted this week that the number of Americans taking off for the long holiday July 4th weekend would fall 1.9% from 2008.

• The World Bank reduced its 2009 forecast, "predicting that global growth will shrink by 2.9%" versus its earlier forecast for a 1.7% contraction. "Global trade is expected to plummet 9.7% this year" it said.
• The U.S. Commerce Dept. reported this week that consumer spending rose a mere 0.3% in May from April primarily as a result of the Obama government's massive stimulus package. The data recorded that the personal savings rate shot up to a 16 year high indicating that consumers were wary of spending amid rising unemployment and plummeting housing values.
• Initial and ongoing weekly jobless claims as reported by the U.S. Dept. of Labor came in higher than expected. "In the week ended June 20, the advance figure for seasonally adjusted initial claims was 627,000, an increase of 15,000 from the previous week".

Renewed violence in Nigeria has once again impacted that country's ability to export both crude and refined products. Indeed, the recent interruption of domestic production from that country's refining industry has resulted in the diversion of North American bound European produced gasoline and distillate cargoes to West African nations.