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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: upanddown who wrote (23793)6/11/1998 12:55:00 AM
From: Tulvio Durand  Read Replies (1) of 95453
 
When there's no storage available, demand goes to zero. Think of it this way. If every car passing the Shell station has a full tank of gas, that Shell station isn't going to sell any gas. Price of gas could be halved and it still would not sell. Only when inventories are drawn down can supply /demand be restored. There's enough oil inventory now to last months even if OPEC were to shut down completely. That's why September crude sells for about $15/barrel. The market doesn't see $18 oil within the next 12 months. Of course some world class event could occur to change that timetable, but for now every tank is full and OPEC's pledges to cut production in July will not restore the supply/demand balance in the near term. Tulvio
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