The market seems to have pushed far too far, far too fast and on the basis of far too little hard information.
More Quotes from Paul Horsnell:
The loss of short-haul heavy crude oil imports into the U.S. market is now becoming significant. None of that effect is currently in the U.S. weekly data, although it can be expected to depress imports in at least the next two weeks of data.Paul Horsnell
After all the gnashing of teeth about demand destruction, waves of imports, and the build-up in commercial inventories of what were previously strategic stocks, the final result has actually been a tightening for the US and Japan combined. Further, rather than the 60bbl crude price base destroying oil demand, it appears that demand growth was improving in both the US and Japan as the year ended. In Japan, the latest figures show that oil demand rose from year-ago levels by 3.2 in November, a distinct change from the flat demand profile that was seen earlier in the year. Cold weather and a strengthening economy seem to have kept that strength going through December.
Paul Horsnell
Developments are continuing to enforce a very downbeat view on prospects for the Iraqi oil sector. In all, the recently increased number of analyses implying imminent and unavoidable price collapses do seem a little premature.
Paul Horsnell
It is lack of spare crude production capacity that turns Iran, Iraq, and Nigeria into fundamental issues. Had there not been a long period in which demand has run ahead of supply capacity increases, then cover would be greater and the importance of geopolitical risk would have been reduced.
Paul Horsnell
The U. S. inventory situation remains extremely tight, with total inventories still falling and gaining no ground on the five-year average.
Paul Horsnell
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