[BillPaay]

Crude soared $1.58 after a bullish DOE report coupled with a weaker dollar provided fuel for the rally. EIA inventories came out overall bullish, contradicting API's report the night before. Products came relatively in line with expectations and as a result cracks were able to strengthen slightly after weakening earlier in the session. Most of the crude draw was attributed to lower imports and draws at Cushing. Though the previous year saw demand at abnormally low levels, the demand picture appears to be improving. The one silver lining here is that jet fuel demand has improved to almost historical norms. Yesterday, crude broke through its 34-day m.a. and is now testing the $72.50-72.90 resistance area. Markets look to an upside target of $75. Based on the head and shoulders pattern seeing on technical charts, if crude manages to get above $75 it has the potential to run up to $89 over the longer term. We have October WTI option expiry today with the largest nearby open interest at the $70 strike (15,000 lots), followed by $65 (13,000 lots) and $75 (6,600 lots). Look for the dollar to provide support for the complex today away from the magnetic pull of the $70 level.