07-16-07 by dugan
I wrote earlier about OPEC refusing to pump more oil because world markets are already bulging. OPEC officials said low supplies of refined fuel and resulting high pump prices were driving oil prices, not the other way around. It turns out that Tom Kloza, chief analyst of the Oil Price Information Service, which expensively provides information to the oil industry, agrees.
In a minivideo on the Marketwatch.com web site, Kloza says:
"I think that the gasoline rally is independent of crude oil and crude oil has gone up … almost like a secondary high tide now, where crude oil is going up because refiners can pay so much for it. But there’s really no evidence of any crude oil squeeze or shortage.
We have nearly 360 million barrels of crude oil on hand… about as much as we’ve had since 1998. … Crude oil prices keep going higher and at some point that’s going to end. There is this disconnect between where the prices have gone and where the [crude oil] stocks are."
Kloza also predicts a return to gasoline at $1.75 or $2.00 if the
disconnect vanishes and oil prices sag. On that point, I can’t imagine
oil companies giving up all of their refinery profit increases so easily.
To view the video, go to Marketwatch and scroll down to their video clips section.
(It’s a hoot to see such awful production values in 2007. My brother-in-law the high-school media instructor does a lot better.)