What we've seen over the last couple of weeks with disruptions at copper mines has narrowed the opinion of whether the market is going to be in deficit or surplus. More and more people are thinking it's going to be in deficit this year.
While we continue to assess the damage from Katrina, the threat to production of new storms is attracting everybody's attention and could drive prices right back up.
Crude inventories went in the opposite direction to the consensus view among analysts. That's taken crude oil up a little higher.
With commodity returns outperforming other assets in recent years, pension and hedge funds are expected to increase investments in commodity markets.
Even with this weather it's not been enough to drive prices considerably lower. Once again we've got that overhanging thought that things could turn colder again and the supply situation still isn't that good. That's supporting prices where they are.
For the last two years everyone's been calling the peak, and everyone's been calling it down, but it just continues to go on.
We saw last year just how much oil shot up after Ivan. Crude markets remain delicately balanced and if Katrina causes substantial damage to production facilities, oil prices will exceed $70 and could push toward $80 a barrel.
We saw last year just how much oil shot up after Ivan, ... Crude markets remain delicately balanced and if Katrina causes substantial damage to production facilities, oil prices will exceed $US70 and could push toward $US80 a barrel.
Then there's Nigeria, also bubbling along, and no short-term view that things there will resolve themselves.
The market is not really factoring in the true impact of military action but the mere mention of it sends prices higher.