The overall supply of crude is very adequate and there is no risk of a shortage out there. This is a big change from 2004 and the early part of 2005.
This is a financial, fear-driven market. It is not fundamental, nor has it been since early 2003, when prices and inventories began rising in tandem. It takes very little for prices to rise.
The heating oil fundamentals are the worst since the winter of 1998-1999 when the price was 30 cents. There is plenty of supply and prices should be lower. It's too early in the winter but in a few weeks prices should be much lower.
The last time inventories were this high was in early 1999 when prices were below $20 a barrel. OPEC wants prices to fall. Saudi Arabia and other members remember that when prices spiked in the 70s there was a rash of investment and they lost a lot of market share for a long time.
The last time inventories were this high was in early 1999, when prices were below $20 a barrel. OPEC wants prices to fall. Saudi Arabia and other members remember that when prices spiked in the 70s there was a rash of investment and they lost a lot of market share for a long time.