Weak consumer confidence figures in the US put a damper on recent strength in the crude markets. While employment growth and increasing business investment are expected to result in a boost to demand in the second half of the year, current statistics reinforce the notion that markets still have a long way to travel to recovery.

Decreased floating storage, an increase in refinery shutdowns due to maintenance and a hoped-for pick up in industrial and agricultural demand due to the coming spring season have all helped pull feedstock and product markets out of the recent doldrums. However, without further follow-through on the economic and financial fronts, expect continued range trading in the short-term.

Despite yesterday's retreat from near-term highs, implied volatility increased only slightly, and most particularly in the front month. The steep producer put skew remains in the crude market, allowing consumer hedgers the opportunity to gain cheap upside protection by accepting a relative bargain for a price floor.

Consumer hedgers who had taken advantage of the previous recommendation in Singapore FO 180 cSt would be sitting on significant gains as of this morning. As a follow-up, the 2Q10 $500/570 call spread can be owned for zero cost by accepting a price floor around the $450 level.