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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (33151)	5/25/2005 9:25:10 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

especially given fairly high inventory levels. high inventory levels in and of themselves are not meaningful without consideration for the fact that CL was steeply backwardated a year ago whereas now the 12-month strip is in mild contango. obviously it makes no sense to hold excess inventories when the futures are backwardated. this was one problem with CI's analysis of CL inventories yesterday. the other problem is that they are just looking at the US without considering the larger global inventory picture. another consideration is that surplus production capacity is down to like 1%, and the surplus such as it is from the Saudis is heavy sour, refining capacity for which is already stretched.