Kevin Norrish
Kevin Norrish
continued four gather last level normal oil patterns politics relative risen shadows
U.S. oil inventories have risen rapidly, relative to normal patterns over the last four weeks. At the level of politics and geopolitical risks, the shadows have continued to gather and darken.
extremely focused gasoline markets product remain weak weakness
US product markets remain extremely weak at present, with most of that weakness focused in gasoline markets.
fairly markets production
Markets have already priced in a fairly sizeable production cut.
aim basket economy global past performance price reasonable target
OPEC has become emboldened by the performance of the global economy in the past year, so a $50 OPEC basket price has become a reasonable target for them to aim at.
couple cut days later less market past perceived price production reacting strength weakness
Paradoxically, the price strength of the past couple of days makes a production cut ... less likely, ... If OPEC does cut production it will be reacting to perceived weakness in market fundamentals later on this year.
consumers dependence dispute edge emphasize energy european gas immediate impact issue potential prices russian served supplies western whilst
Whilst the immediate impact on European energy prices has been negligible, the dispute has served to emphasize the dependence of Western Europe on Russian gas supplies and the issue has the potential to keep European gas consumers on edge for some time.
behind changes easy inventory strong sucked weekly
It's easy to get sucked into weekly changes in inventory level, but behind that, we still have very strong demand.
dramatic explosive increase oil prices rise seen spread
It's because we've had such an explosive rise in heating oil prices -- I don't think we've ever seen such a dramatic increase in the spread between heating oil and crude.
chinese demand exert further growth highly likely looks oil pressure slow supply
After such a slow 2005 for Chinese oil demand an acceleration in growth looks highly likely in 2006 and this will exert further pressure on oil supply and prices.
nigerian potential run situation
The Nigerian situation has the potential to get a lot worse. It's going to run and run.
both demand erosion massive mild moving sides time weather
It's moving up and down. We've got an erosion of the idea that there has been massive demand destruction while ... at the same time you have got some pretty mild weather on both sides of the Atlantic.
concern crude extremely global inventory levels low obvious oil particular product sign
With global inventory still at extremely low levels and particular concern over low product and crude oil inventory in the U.S., there is little obvious sign of any significant weakness.
delivering far function ground investment legacy oil period problem running seeing
What we are seeing is not a function of the world running out of oil. What we are seeing is the legacy of a very long period where investment has been far too low. The problem is getting the oil out of the ground and delivering it to consumers.
concern crude disruption few market output potential stretched system tightly
There's still going to be concern about potential hurricanes in the market for a few months. Crude output and refining are so tightly stretched that you don't need a big disruption to put the system under a lot of pressure.