More big earnings misses from big oil and a global currency reversal of fortunes has oil giving back early, overnight gains. Suddenly the dollar is stronger as a Fed official says that an interest rate increase is on the table. And in Europe turmoil over Scotland voting on whether to trigger the mechanism to leave the European Union and a spike in Greek bond yields muddies the water. This turmoil comes as BP and Total report big fourth quarter misses on earnings that will reduce those company’s ability to invest in long term projects making the increases in U.S. shale oil rigs and rising U.S. oil output seem less significant.

Oil products are weak as demand fears are weighing down the market, awaiting a time when supply is at historically high levels. Gas demand is at a 6 year low as bad weather in California has given a hit to demand and warm temperatures elsewhere in the country is reducing heating oil demand. This comes as refining margins for big oil companies are reducing the positive impact from OPEC inspired oil price increases.

BP Plc on Tuesday reported fourth-quarter earnings came in at 13 cents per share, a miss of 3 cents a share from estimates. The big problem for BP was a drop-in refining margins that previously shielded big oil companies from falling oil prices. Yet refining is a drag on earnings even as revenue was higher. Stronger demand for products with less of a profit margin will make it tough for the company to talk about an increase in capital spending. BP said it will reduce capital investment to between $16 billion and $17 billion this year, down from $19.5 billion in 2015. The company also will sell $5.5 billion of assets this year, up from $3.2 billion in 2016.

Phillip 66 also missed yesterday as total adjusted net income of $83 million fell 88% as its refining unit had adjusted loss of $95 million. Royal Dutch Shell is selling $5 billion dollars of assets to cut debt as it reported its lowest full-year earnings in more than a decade.

Big oil isn’t making money or at least not the type of money it will take to make the investments needed to meet the demand of the future. You can add shale rigs all day long but it will be hard to replace the projects that big oil won’t be investing in. While short term, this market may be focused on a U.S. product glut, right now we are on the road to a very tight market in the very near future. Short term economic turmoil may hold back oil but the continued investment retrenchment by big oil is a concern for this market.

In the meantime OPEC is on their best behavior. Compliance to production cuts is said to be running close to 91%. As I said before, OPEC compliance would shock the naysayers and it sure has.

Is the natural gas weather related selloff over? It sure seems to be. After a failed test of $300 it seems like we are starting to see a rebound. Look to be a buyer of gas and use $300 as a temporary floor.

AAA says that the national average price of regular unleaded gasoline remained relatively stable over the past week, settling at $2.27 per gallon. Although the average remains flat compared to one week ago, drivers are paying ten cents less per gallon month-over-month and 52 cents more per gallon year-over-year. Still demand is very weak. I think its seasonal so look for demand to snap back. Look for weakness to buy calls ahead of the summer driving season.