Lead Story Over At Yahoo!Finance Right Now: Why Cheap Oil Could Disappear Soon; Oil Trading Up Another 1%; Trading Solidly Above $97

The report was a bit misleading; the story was a bust, but here it is for what it is worth (and why I don't watch CNBC any more).

Finance!Yahoo Breakout is reporting:

And finally, Baruch says, most investors are celebrating a party that doesn’t even really exist by looking at the 13% slide in WTI or NYMEX crude, instead of the 5% dip in the price of the more globally watched Brent crude, which is still above $110.

“The reality is, everybody is focused on WTI (West Texas Intermediate).  You have to focus on Brent. Our government even uses Brent as a benchmark. What’s really moving (things) is the Brent.”

As he sees it, even if OPEC holds off on trimming its output quotas tomorrow, high domestic production, and backlogged refineries will serve as a floor in the price of petroleum prices. (sic)

I don't understand how "backlogged refineries" will serve as a floor in the price of petroleum prices. Backlogged refineries will serve as a floor in the price of refined products, but ....

This is very circuitous reasoning but perhaps this is why "backlogged refineries" could serve as a floor "in the price of petroleum prices." (sic)

Because of the Bakken, the Permian, and the Eagle Ford, the US refineries are backlogged. However, the European refineries are not facing a huge increase in oil. The US does not allow oil to be exported, and most of Canada's oil is landlocked. Therefore, Brent oil will take its own path: higher.

The folks above suggest the price of NYMEX/WTI will tend to follow the price of Brent oil.

In addition, the US refineries need heavy oil from the Mideast to "make" the light oil "work" in US refineries which are optimized for heavy oil. If there is a glut of oil in the US, but refiners need heavy oil from overseas (including Venezuela), they might pay a premium for Brent/overseas oil.

I don't know. Like I said, it's circuitous reasoning.

On a day-to-day basis, all things being equal, it is the strength of the dollar that affects the price of oil the most.

Right now, the "thing" most oil traders are focused on is the global economy, trying to figure out if more or less oil is likely to be used. And smart traders are watching one country.  Okay, maybe two. Countries.