Crude hasn't been responding to fundamentals all year. I think crude has been 8 to 10 overvalued for some time and has been responding to the fear of what could happen rather than the reality of what is happening.
More Quotes from Kyle Cooper:
The market is lower as weather forecasts are considered rather bearish through the middle of the month,Kyle Cooper
The heating oil fundamentals are the worst since the winter of 1998-1999 when the price was 30 cents. There is plenty of supply and prices should be lower. It's too early in the winter but in a few weeks prices should be much lower.
Kyle Cooper
Concern about Iran resuming nuclear processing seems to be the only driver. U.S. weather remains bearish for the next two weeks.
Kyle Cooper
The recovery continues to be slow. Government reserves will more than make up for reduced production but they will eventually have to be replaced. This will probably end up being the most damaging storm to the industry by far.
Kyle Cooper
We've lost 450,000 barrels a day of production, which is significant. Shell hasn't given us much of an idea of when they will be able to restore output. This is a pretty reasonable reaction given that we don't know how long it will be before the production is back to normal.
Kyle Cooper
Distillate inventories were up slightly but are not rising at a normal pace, so that is a little bit concerning.
Kyle Cooper
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