ISSUES....
Inside, confidential, off the record

 

Crude oil , finally weaker

BUT ONLY JUST MODESTLY , while nat-gas prices remain firm. OPEC officials continue to very publicly state that to the best of their knowledge there is no shortage of crude, with Qatar's Oil Minister, Mr. al-Attiyeh, stating rather bluntly for the international media that

a big portion of the oil price today is related to geo-politics and fear factors, and we cannot solve it. Sometimes there is a shortage of products, but not of crude [and] we don't have magic stick to solve this.

When Mr. al-Attiyeh speaks, we tend to listen. The market is listening to him, for it is trading weaker. Too, the backwardations are "coming in" a bit, with the Dec/Feb backwardation narrowing to $1.87 Dec over, from $2.37 on Friday. $1.87 is still a very materially backwardated market, but it is also materially less so
than it was.

Tomorrow (Wednesday) we shall once again have to deal with the weekly inventory figures for crude and its products. Crude inventories are expected to be up once
again, with the consensus centering upon an increase of 0.5 million barrels. Gasoline inventories, becoming less and less of a concern as we move away from the driving season in the northern hemisphere and move toward the heating season are expected to be down marginally. For lack of a better number let's call it -0.4 million barrels. Distillates are likely to be down also, but a bit more thanshall be gasoline's inventories. Let's call distillates down 1.1 million barrels. As for refinery capacity utilisation we look for something between 87-88%:

Dec WTI down 31 92.77-82

Jan WTI down 10 91.86-91

Feb WTI up 6 90.90-95

Mar WTI up 12 90.04-09

OPEC "Basket" $84.80 10/26

Henry Hub Nat-gas $6.43

 

Commentary from Dennis Garthman /10 30 07

For more on interesting comments, you can subscribe to The Gartman Letter by contacting Dennis Garthman: Phone 757 238 9346, Fax 757 238 9346 or dennis@thegartmanletter.com

 

Petroleumworld 10 30 07

 

ISSUES.... Is an independent journalist effort from Petroleumworld, on Inside, Confidential
and Off The Record Information, its views are not necessarily those of Petroleumworld

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