Everybody expects it is going to be bad but nobody really knows. Guesses range from a draw of 10 million barrels on crude to 9 million barrels on gasoline. |
Fundamentally, we do have enough oil right now, and we have enough products. We may not have enough in future if we get this cut-off because of possible economic sanctions against Iran. |
Gasoline is definitely the weak sister. As long as we can hold above 24 days of supplies, we'll have no trouble going into the summer. |
I wouldn't be surprised if that $2.10 is the high for the week. |
If we get another increase in refinery runs like we got in last week's numbers we may get a sell-off. |
If we manage a major correction now we maybe could get down to $65.50. The only thing that could give us a big pull back would be if Iran blinks and says it's going to stop its uranium enrichment. And I don't see that happening. |
It's probably going to go higher from here. |
Not a drop of crude oil production has come back in the Gulf. It's going to take weeks and maybe months rather than days to get the industry back on its feet. |
That arc is probably 600 miles. And Rita's going to hit somewhere in those 600 miles. |
The initial euphoria that the world didn't end was followed by the hard reality that ... these refineries are going to be down for a while. |
The most temperature-sensitive products are the gas and the heating oil and that's what's moving the market. |
There's less crude being run now through refineries than there is loss in production in the Gulf. We're estimating refinery runs are down about 2 million barrels a day while crude out of the Gulf is down a million and a half. |
There's still healthy demand in the oil industry. |
They're not going to resolve it unless there's a last minute deal done with the Russians. The Mullahs in Iran want a nuclear capability and that's why they have to be stopped. |
We're not going to have anything firm from the UN on Iran, maybe for months. Tensions will stay high, maybe for two or three months, and that may drive prices higher. |