Tobias Merath Quotations

Should Hurricane Wilma's path indeed go over Florida and spare the oil infrastructure at the Gulf Coast, as the National Hurricane Center predicts, oil should drop further.

The refinery outages should lead to weak demand for crude oil from the refining sector. It's not crude oil that is in short supply, but gasoline and distillates.

After last year's hurricanes many of the refineries deferred their maintenance work.

We expected prices to come down to around $60 a barrel and that exactly where they are. There is still the minor risk that the hurricane could change course, but this is very minor.

Larger imports apparently more than compensate for production losses in the Gulf.

With the ongoing political tensions in Iran and with Nigerian militants threatening more attacks on oil companies, short covering should push prices higher next week. Speculators still hold a considerable amount of short positions. With the current news flow, those investors should feel increasingly uncomfortable with their positions.

There is still the risk to production outages as long as hurricane season is not over.

Crude oil inventories increased once more, improving oil availability further. Another important factor is that above-normal temperatures in the U.S. seem to curb heating oil consumption.

Since many refineries deferred their maintenance work after the hurricanes, we expect this year's turnaround season to be particularly heavy. As a result, crude oil consumption by refiners should decrease, which could over the next weeks lead to falling oil prices.

It would be an inappropriate signal to cut, because they are keen on pointing out they'll do everything to keep markets well supplied, especially after such an incident.