Oil climbs to the highest since April

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One thing I didn’t highlight in my post on bonds is that some input prices are rising, particularly oil.

Now cracks have faltered so gasoline hasn’t moved up much but with oil prices up here, they eventually will. Especially with WTI crude oil up $1.30 to $82.83, the highest since April 30.

The reasons for the strength are tough to pin down. The inventory numbers coming out of the US haven’t been good and the growth numbers coming from everywhere have been soft. There was a huge built-up short position at the start of June and I think the early-June rally was a squeeze on that but could we still be squeezing?

There is some talk of an Israel-Lebannon war and I’m keeping that in mind as a catalyst, though political moves tend to fade fast unless there is an actual impact on production.

Whatever it is, technically, there is some blue sky here if we get a close above 82.41 today, which was the mid-June high.