Makoto Takeda Supply Quotations

Given the capacity constraints, the effect of additional barrels of crude oil seems limited and the amount of gasoline will be insufficient to ease current supply tightness.

Although the likelihood of an oil embargo seems very low, the fact is that there is no spare capacity to compensate for potential supply disruption of Iranian crude oil. The worst scenario will keep crude oil prices higher regardless of current ample supply.

There is too much supply and prices are likely to fall further. The Iranian situation is already reflected in current prices unless there is more substance on when sanctions may be imposed or oil exports affected.

The IEA release is obviously a bearish factor, a large portion of which consists of crude oil. Given the capacity constraints, the effect of additional barrels of crude oil seems limited and the amount of gasoline will be insufficient to ease current supply tightness.

The latest energy department statistics were very bearish. Coupled with ample supply in crude oil and distillates, recent rapid recovery in gasoline inventories will continue to weigh on the market.