Michael Fitzpatrick High Quotations

Milder weather forecasts for this week and extraordinarily high stockpiles continued to weigh on sentiment.

Relatively moderate weather, ample supplies and an escalation in the dispute over Iran's nuclear program should make for another week of high volatility. Absent geopolitical uncertainty, prices should be moving lower.

The real dichotomy in this market is that crude inventories are very high and that could make for some violent, back-and-forth price action. For the foreseeable future, the path of least resistance remains up until there is a significant structural economic or political shift.

Crude inventories are at extraordinarily high levels, due in part to a steady flow of imports in recent months, giving the market a thick buffer against potential supply disruptions.

We are starting to see a change in consumer behavior. Consumers are cutting back because of high prices, rising interest rates and signs that the housing bubble is ending. Prices have probably begun the long steady process of grinding lower.

I'm expecting builds across the board. Imports should continue to arrive at a high rate, which will raise crude stocks, and refineries continue to return, which should do the same for the products.

Despite a weekend blizzard in the Northeast and an oversold market after a 16% sliding the last six sessions, record high levels of gas in storage would temper any buying even if the weather stays cold.

Gasoline has led the way lower. High imports and expectations of a switch to gasoline production have led to concerns that supplies will swell as we go into the summer driving season.

It's high noon at the Security Council. Prices will rise because tensions are high. Iran has said that it would not specifically use oil as a weapon but now they are changing their tune.