Media saying oil prices up because of cold weather - today's price move is not consistent with weather

The mainstream media is attributing today's move in crude to weather, however the move is not consistent with a weather related move. Oil came into the day slightly down on the back of a bearish API inventory report and was then hit with a slightly disappointing EIA inventory report. It then proceeded to fall about .50 and was slowly recovering when it spiked over $1 bbl in the course of a few minutes. This spike was coincident with spikes in Gold (up $18 today), Silver and Copper which indicates it was most likely a liquidity/moneyflow related phenomena. Natural Gas (which is up due to weather) was already up strongly at the open and jumped only .05 or so when crude made its big move. Furthermore, the crude oil term structure does not support today's move being weather related either since back month crude contracts (Dec 2012-2018) are actually up more than the front months which is the opposite of what one would expect from a short term weather related move.

I've attached an article from yahoo with a typical story below:

Winter blast sends oil prices to 14-month high
Energy prices jump as winter storm blankets cities from Baltimore to Beijing

By Mark Williams, AP Energy Writer , On Wednesday January 6, 2010, 12:46 pm EST
Snow, ice and wind wreaked havoc on energy markets Wednesday, where a barrel of oil topped $83 a barrel for the first time since the fall of 2008. Natural gas futures soared 6 percent.

Dangerous temperatures that knocked fruit from vines in Florida and made driving treacherous in New England had people reaching for the thermostat.

Weather easily trumped a surprise report Wednesday from the Energy Information Administration that showed the supply of crude and gasoline in storage is growing.

The amount of gas placed into storage last week was three times greater than what was expected by energy analysts polled by Platts, the energy information arm of McGraw-Hill Cos.

Still, there has been a huge influx in speculative money entering the market to start 2010, said Peter Beutel of Cameron Hanover. A weak dollar has attracted billions of new dollars. Oil is bought and sold in the U.S. currency, which means investors holding euros or other stronger currencies can get more oil for less when the dollar falls.

But it was dropping temperatures from Baltimore to Beijing that had energy prices moving. A big snowstorm hit Beijing Wednesday and freezing temperatures were expected to last there through the week.

Benchmark crude rose $1.13 to $82.90 in the New York Mercantile Exchange. Prices rose as high as $83.15 earlier in the day and that has begun to drag pump prices higher.

By the weekend, the national average price for a gallon of gas in the U.S. will top $2.70, predicted Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

That would be a rough start to the year for consumers. Prices never hit that high last year, even during the peak of the driving season over the summer.

Rising gas prices come even as more people are staying home because of the bad weather.

Prices at the pump climbed 1.8 cents to $2.685 per gallon overnight, according to auto club AAA, Wright Express and OPIS. That's 6.2 cents higher than a week ago.

In other Nymex trading in February contracts, heating oil rose less than a penny to $2.1984 a gallon. Gasoline rose less than a penny to $2.1304 a gallon. Natural gas futures rose 33.4 cents to $5.971.

In London, Brent crude for February delivery rose 88 cents to $81.47 a barrel on the ICE Futures exchange.

Associated Press writers Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.