The market reacted as it should to a series of related, short-term events. The loss back in February of Valero's McKee, Texas, refinery, located very close to the NYMEX crude delivery hub at Cushing, Oklahoma, led to a situation where crude could come in, but it couldn't get out.

The result? A sharp selloff in the front of the WTI curve, as traders who did not have storage were forced to liquidate positions. Cushing storage built to record levels, and the weakness in the front of the WTI curve sent the WTI-Brent spread to record lows.

Of course, that action was all at the front of the market, while in the back of the curve, WTI-Brent spreads remained firmly in positive territory. Interesting to note, now that the WTI-Brent spreads have gone positive in the front of the curve, calendar 2010 WTI-Brent spreads are negative.

Likewise, the weak WTI values, along with the downed refinery capacity and normal gasoline demand growth, pushed the front-month RBOB crack spreads out to record highs well above $30/barrel.

Once the downed refineries came back on line, the spreads all moved back into more "normal" values as crude demand and gasoline production increased, increasing the need for crude imports and lessening the need for gasoline imports.

Before conspiracy theorists weigh in with speculation about speculators, the Barrel would like to put their minds at ease. These were not speculators pushing values around, but reactions to fundamental market events. Speculators likely exaggerated the moves, and may also have sped the recovery to more normal levels by exiting positions quickly once fundamentals turned around.