|In its Monthly Oil Market Report Market Overview, the International Energy Agency states:
"What is needed to take the heat out of oil markets is more oil product, and soon. When crude oil is available, refiners can ... refine and deliver more product to consumers. But there is no guarantee that they will do so.... The gasoline season is now underway, in both the US and Europe, with stocks below historical norms....
"But continuing high prices are not just a matter of refining capacity. Much of the new crude oil coming on the market is heavier and higher in sulphur than the light crudes usually used to make gasoline. It will be difficult and expensive to refine into gasoline, particularly gasoline meeting the new standards.
"The picture emerging from the top half of the table above looks reasonably comfortable, especially if Saudi Arabia, with or without others, adds an extra 0.5 mb/d to third and fourth quarter supply. This could help cool market anxieties. But the stock situation depicted in the bottom half of the table warrants serious attention.... In any case, colder than normal weather could trigger heating oil shortages: some driving is discretionary, heating is not."
See the full report in our archive or a current report at IEA's website.