OIL DOWN AGAIN...SOME DISTRIBUTION HIKES...EARNINGS...PPI...AND BOY ITS COLD OUTSIDE!!!

18 degrees at my house this morning which i guess is a sign that winter is here. And the pattern overall will be cold to very cold for the rest of this month and heading into February. Whether that ever has any effect on crude prices remains to be seen. Meanwhile i just peaked up to see Crude down nearly a dollar and getting ready to break through the 50 dollar mark! Meanwhile as shown yesterday MLPS have diverged from the rest of energy so i think all time highs on the MLP index will be hit in short order.

Meanwhile lets backtrack to last night where we have some leftover news. Plains All American (PPA) which recently completed its merger with Pacific Energy Partners boosted its distribution by 5 cents. Also yesterday after the close we had earnings out from Energy Transfer Equity which were down but there are distortions here with regards to Energy Transfer Partners (ETP) and its aquisitions. Kinder Morgan Partners (KMP) will have earnings out today after the close with a conference call to follow.

This morning Lehman Brothers starts Penn Virginia Resources at equal weight. Nothing else so far in the upgrade downgrade department.

10 year sitting at 4.73 before the PPI number and with the core at 0.2% the yield at 4.75% imediately afterward. So far not much impact on stock futures.

Okay so we wait for the open. One thing i think we need to watch for is whether any kind of rotation developes as investors opt out of anything energy and move their money into anything but energy. What is supportive for MLPS is the fact that distributions are coming and that should really keep any selling in check. The positive divergence in the MLP index vs the XOI index indicates that the market has already figured this out.

Just a quick note about weather patterns across the U.S.A. Some of the longer range models are indicating that the weather could turn brutally cold across the midwest and especially the northeast toward the end of the month. These models tend to be very volatile from run to run but they have been showing this for a few days now so the odds of it happening are increasing. Eventually people have to start using heating oil unless they are burning extra wood like i am! And that ain't cheap either as firewood prices are up about 50% from a year ago. No way to hedge since i don't trade firewood futures!