Tuesday Topics:

1. Oil - tied to Iran. Early inventory expectations run the gamut.
2. Gasoline - ditto plus domestic blazes cause more refiner downtime.
3. Natural Gas  - winter has left the building.
4. Weather - long hot summer looks to be in the cards.
5. Odds & Ends - truly odd today.

Oil Closes At New High For 2007 (well, for the front month anyway). Reason: Iran. May crude nosed over $63 interday and closed at $62.91. Headlines everywhere are ringing crude closes at its highest level of the year to date. Not for the May contract which has been as high as $63.75 back on the March 8th. I know, I'm just being picky. The reporters should tell you that the 12 month strip closed up $1.22 to $66.70, a 3 month high.

Inventories A Secondary Consideration. Estimates for Wednesday's crude inventory report range from a decline of 2 to an increase of 2.6 million barrels of crude. Most analysts see a decline in gasoline stocks of at least 2 million barrels. What Iran does will no doubt take precendence this week.

Gasoline put on the real show rising $0.07 to $2.067 for April delivery.  That makes a $0.525, (34%) rally in the nine weeks since (CVX) announced it had a fire at its Richmond, CA site on January 15th!

• Since mid January the maintenance season has turned into a Ray Bradbury novel with fire after fire being reported. From Imperial Oil forcing the Torontons to ride bicycles to blazes at (VLO) and on and on.

• (BP) reported another fire, this time at its 175,000 bpd Whiting, Indiana refinery last Thursday (two years to the day after its infamous Texas City fire) and said yesterday that the facility would be offline 4-6 weeks.

• (HOC) also announced a fire yesterday at its 26,000 bpd Salt Lake City, UT facility. Output was listed as reduced but if it goes offline this represents nearly a quarter of the company's capacity. Holly has one other facility, an 82,000 bpd refinery in New Mexico.

• Most (but not all) of these snafu can be seen here along with when the facility returns or is scheduled to return to service.

• It Just Doesn't Get Any Better Than This Watch: Deutsche and BS even downgraded a couple of prominent refiners before the open yesterday based on valuation and/or topping margins in the east. I doubled my hobbled (TSO) put position yesterday as it's been rallying on what will almost certainly turn out to be  an anomalously high and relatively short lived crack spread period. Thanks for the help fellas. Good company, nothing personal, just too far too fast with a lot of hot money on the trail.

Natural Gas. Along for the ride.  It's time to think about making the switch from thinking about heating degree days, HDDs, to cooling degree days, CDDs. You'd think it was still a little early to worry about cooling load but then you look at the forecast and it's already warming up. Ok, maybe it's just hot around here. CDD's are still only expected to total 6 this week and next for the whole country.

• Turning back to heating degree days, last week was about the same as the prior week at 110 (which the Climate Prediction Center pretty much nailed at the beginning of last week). We should see another small injection into storage this week.

• The early read on this week's weather is for HDDs to drop to 67 (typical slack demand should season weather). Expect an even bigger build.

Weather Watch: 90 Day Map. Welcome La Nina. Gas may fall to $6 once Mahmoud backs down and oil cools a bit but a hot summer forecast will put a floor under a commodity like gas that fuels 20% of electricity generation.

If that one's too general for you click on the thumbnail summer map from the International Research Institute for Climate and Society.

Odds & Ends 

From the "you wouldn't believe what sort of stuff I read at night" file: From Wallaces Farmer: If La Nina establishes itself before mid-May, the risk of severe drought would increase from 25%, which is the chance now, to about 33%, says Taylor. That would mean about a 70% chance that the U.S. average corn yield for 2007 would be below the trendline of 148.4 bushels per acre. Weather conditions so far in March translate into a projected U.S. average corn yield of 146 bu. per acre for 2007, slightly below the trendline.

Comment: This guy is talking about cornbelt meteorology and this is supportive of high ethanol and gasoline prices as well as high beef, milk, and obviously corn prices. In fact, if you look around a bit on the web you'll see numerous recent reports citing reduced crop yields in everything from cotton grown in the Mississippi Delta to oranges in Brazil. Hello inflation.

From the "tell you 'bout the plane crash with a gleam in her eye" file: Storm Depot: (TELA) - yep, they're public, they're setting up hardware stores in Florida selling hurricane preparedness materials (with installation) and they're no doubt going to get sued over that name. Still, it'll probably run like a banshee when the first tropical storm bends toward the Keys. Not an endoresment. Just an amusement.

(END) Watch: No news is apparently good news as the stock appears to be pulling out of its slide. They speak at Howard Weil on April 5th and should, by then, be pretty close to being able to pindown a spud date for their next exploratory shot (Balgownie) which has the potential to double up the company from a 3P reserves basis.

Analyst Watch: (CRZO) upped to buy Keybanc, B of A picked up the solar companies with mostly neutral ratings except for (ESLR) which it rated sell and (SPWR) and (FSLR) which it awarded buys.