Rakesh Shankar Quotations | Page 2

For nearly five straight weeks, the EIA stock report has now surprised the market with inventory numbers on the upside. As a result, prices for crude especially will revert to the lower numbers seen in December.

With production along the Gulf Coast slowly, but surely coming back on line, the outlook for inventories is positive.

Crude inventories remain sturdy, despite today's unexpected drop.

Traders are now starting to worry more about demand destruction than about supply disruptions.

The possibility of a warmer than expected summer, along with a spike in crude oil prices and a freak heat wave in Texas that led to a surge in demand for natural gas all helped boost natural gas futures prices to well above $8 this week. Prices look to stay there in the near term, despite the record inventories.

Inventories for this time of the year remain well above average, and in the upper end of the average range for this time of the year.

Inventories for this time of the year remain astoundingly above average.

Inventories are extraordinarily sturdy, and OPEC's commitment, at least in the near term, to not cut production should only serve to reinforce the ample supply of oil in the market.

There is a real risk that U.S. refineries will be unable to sufficiently bring back capacity in time for the summer driving season. This will force increased reliance on gasoline imports, and higher prices for consumers.

At this pace, all the pieces are in place for both total crude and gasoline prices to ease before the peak summer driving season sets in, as we expect.