egghead, good to see you.

1. Gascracks are strong because US gasoline inventories are at 4_year low.
Refinery runs are low recently, margin for refineries to make gasoline are also low. US had a very cold January, it\'s more profitable to make distillates. Physical crude is trading $3-$4 over the screen, physical gasoline is trading few cents under the screen, there is no incentive for refineries to make gasoline.
Gasoline imports are low.
I am not sure where you read about overseas oil are higher than US oil, Brent is stronger than TI, but only in the front contract. May be they meant physical oil vs the futures contract? The crackspread you see on the screen is not reflecting the phyical market prices.

2. USO roll is the biggest CL1-CL2 contango play right now, it was 22% of the front months open interest last month. Market knows when they are rolling, and tried to take adventage of it. It went from $3 to $8 during the roll, and came back to $3 afterwards. USO also said they will change their rolling period from 2 days to 4 days, so that is not so heavy on the spreads.
I think the contango will be there for a while, as long as we are still in the bear market.

Yani, one week of inventory # may not mean much, CLH expires tomorrow, there are some short covering after coming off $10 in a week.

I wrote a funny story in my blog, you make get a kick out of it. :-)

I am afraid to write in English now, hope Press1forEnglish won't pick on me. :-)))