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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Salt'n'Peppa who wrote (121454)6/8/2009 1:54:54 PM
From: axial  Read Replies (1) of 206198
 
S&P, great resource. Thanks.

From a linked FT article, there:

"Of course, unless US refinery utilisation continues to go up this week, those constant Opec volumes may have to be taken up elsewhere.

What this might imply is that floating storage is essentially being churned through the system, the floating phenomenon itself resulting from a need for a buffer to compensate for oversupply during the lower demand period of the crisis. In that case — as we are not out of the catch-22 scenario described above just yet — some level of restocking should be expected in the weeks to come.

However, it is also entirely possible the world is simply becoming used to a new norm in forward-cover periods as it adjusts to protect itself from upcoming supply shocks.

This could be an attempt to echo the EU’s own inventory guidelines which aim for at least 90 days of forward cover, versus the OECD average of 60. In that case it doesn’t matter how much extra inventory there is out there, we’re setting a new paradigm and the price of oil can happily disregard the current inventory builds, especially while tanker rates are cheap."

ftalphaville.ft.com

The linkage between supply and demand looks broken, if only temporarily. I'm searching for reasons.

Jim
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