Nobody knows the full extent of the damage, ... The speculation is that it will be worse than Ivan, but we won't really know for days, until oil companies get personnel out there and survey the damage.
Nobody knows the full extent of the damage. The speculation is that it will be worse than Ivan, but we won't really know for days, until oil companies get personnel out there and survey the damage.
There is a lack of heating demand. We're experiencing a very unusual warm pattern in the United States. Also, the DOE (inventory) expectations are pretty bearish for tomorrow.
There is a little bit of uncertainty on how quickly offshore production might come back online.
Trading is rather quiet this week because of Columbus Day and the Jewish holidays. You often see big swings in prices when the volume is low. Also, gasoline is close to $1.80, which is probably a little overboard in spite of the fall in demand.
We won't know the full extent of the damage for weeks. A lot of the damage that occurred when Hurricane Ivan came through last year was underwater, which was difficult to survey and then repair.
We were already on the rise through $65 on a few minor (refinery) supply disruptions. It's just another inflammatory issue to add to the short covering at the end of the week.
We were already on the rise through $65 on a few minor supply disruptions. It's just another inflammatory issue to add to the short covering at the end of the week.
We are looking to an active turnaround season because of all of the deferrals from the fall. Refineries that planned to upgrade facilities put them off because of Hurricanes Katrina and Rita.
The size of the distillate draw wasn't spectacular but is disconcerting given that we are approaching the heating season. Heating oil is ascendant right now, while interest in gasoline wanes.
There will likely be a brief (post-hurricane) spike as with Katrina. Hopefully it will not be prolonged.
With each leg lower in natural gas, it becomes that much more economical for larger industrial users to come back to natural gas.
The good news is that with the 30 million-barrel sale of SPR oil, I don't think we will have much of a deficit in crude oil production.
Oil prices have consolidated in the upper $60s. There's a balance between the supportive geopolitical concerns respecting Nigeria and Iran, verses the bearish influence of excess crude supplies and warm U.S. winter weather.
Also refinery utilization was lower, which was also unexpected. It means that refineries are not using as much crude, so as a consequence of that we got a larger-then-expected crude build.
There was a larger-than-expected draw in crude-oil stocks and imports fell, which was surprising given that ports had reopened. The size of the distillate draw wasn't spectacular but is disconcerting given that we are approaching the heating season.
The news that Saddam's sons may have been killed gave traders a feeling that things would be a little bit more settled in that nation.
It's positioning before the EIA survey, where most people are expecting a build, especially on the product side.
The fear of a replication of that is going to keep the market on its toes and we could easily test $70 a barrel.
Inventory levels remain well above average and near-term supplies are not a problem, so the recent rally will be difficult to sustain.
Gasoline demand is low enough and imports high enough to have another stock build.
Gasoline will continue to lead other energy contracts until Gulf-area refineries return and European imports start to arrive.
After Hurricane Ivan, it took several weeks to know the full extent of the damage to seabed pipelines. Some people are quite worried that this time could be worse because of the strength of Katrina.
The gasoline data is bullish and right now gasoline futures are showing the highest gains. We'll see if that leads the market.
The gasoline draw was a little bit larger then expected, so I think this will support prices.
The Iranian news has been propping up prices. Once it became clear that oil was having a hard time staying above $66 the funds began to sell. There is no immediate threat of a disruption and unless we have a prolonged disruption supplies are sufficient.
Even with the crude draw, we still have a lot of it with supplies still above normal.
Eventually we'll turn around on geopolitical concerns about Iran, but as far as the inventories are concerned it's pretty bearish.
It's a weather story. After experiencing an incredible Arctic weather pattern in most of December there is now evidence of a warm-up after Christmas.
Heating oil is ascendant right now, while interest in gasoline wanes.
Heating oil is ascendant right now, while interest in gasoline wanes. The size of the distillate draw wasn't spectacular but is disconcerting given that we are approaching the heating season.
The latest security threats in Saudi Arabia, even though they're not directed at oil installations per se, and the continuing refinery issues are having a supportive role.
The market is so hyper-sensitive to changes in the storm. The thinking is it will be less of a direct hit on Houston and therefore less damaging to energy interests and that was enough for people to take some profits.
