Michael Wittner Quotations

If there is a bearish theme, it's about U.S. product demand.

The oil is in the ground waiting to be exploited. But how do we get access to what is left? At the end of the day the drill bit has to hit the ground.

Last week's bearish and pessimistic mood was overdone, considering that almost 900,000 barrels per day of U.S. refining capacity was still down (pre-Rita), and that global product demand is forecast to increase by 3.5 million barrels per day between September and December.

Winter heating oil and gas oil stocks are comfortable right now, but we've lost a lot of refining capacity in the U.S. It's amazingly bullish. That's the bottom line.

The upstream and downstream constraints are real and long-term and we're seeing almost daily examples of them. We're going to have a very strong price environment until the steam is taken out of demand or until investment catches up and restores a spare capacity cushion to production and refining.

There is underlying caution, even on the part of Saudi Arabia, about the second quarter. I wouldn't rule out the potential for bullish language about a possible cut in March or April.

It still comes down to all the refinery outages in the United States. It still looks very bullish.

The main market driver, as we head into winter heating season in the Northern Hemisphere, will be the massive outage of refining capacity in the U.S. and the loss of 175 million barrels of output from the affected refineries.