Here is good update of fundamentals starting to overtake the Speculated price drivers that have nothing to do with demand or market based forces. The fear premium from Japan’s crisis went the wrong direction – as worlds 3rd largest consumer of Crude oil it should have gone down $20/Bbl not up because a lot of crude was released into the market. Libya was pure speculation as only 2% supplier it is merely a rounding error & trying juxtapose its position to Saudi Arabia is ridiculous.
Lets hope that the already developing loss on short positions for crude catch a lot of the 4 to 1 Wallstreet trading speculators & bankrupt their companies ……. unfortunately lot these folks are mutual fund investors managing your 401K/IRA.
The price drop/correction should yield good margins for Refiners & some analysts are already predicting good quarter for Valero & ect – be good see some stampede towards upstream investments get reality check. But I expect the petcoke fuel market is running a close second to Crude as overpriced & over-speculated due to lot issues on how accurately market price indexes reflect market as opposed to fudged values. And perhaps the tsunami of new high sulfur petcoke capacity that has been installed in 2007-2011 will actually see the market ~ US/NA production levels havent broken 2004 39MM mtpy level even though +5-6MM mtpy capacity has been installled but due economics/low utilization/ect has never seen market.
Regards
