While oil tries to decompress, the truth is that it is still boiling underneath the surface. Speculation is running high that talk of an SPR release may be more than political but a preemptive strike before a conflict breaks out with Iran. The Saudis are pledging to pump more oil, but at the same time that raises the question of tightening spare capacity. Dow Jones is talking about oil at all-time highs as, "Concern about a thinning cushion of available oil, which is already less comfortable than it was during last year's Libya crisis, is driving fear that tensions with Iran could send prices as high as in 2008, when crude neared $150 a barrel.”
Dow says that spare capacity stood at 2.5 million barrels a day on average in January and February this year, compared with 3.7 million barrels a day in the same period last year. The numbers come from the Energy Information Administration, an agency that predicts oil-market trends for the U.S. government.
Still, while oil has been range-bound to down the last week, it seems that if oil breaks one more time it should be bought. Outside indicators seem to be suggesting an upside breakout. Does it make you wonder what that suggests for the overall state of the world? While an Iranian parliament speakers says that Israel won't attack, the market is saying otherwise.
The EIA says that US Nat gas imports are at the lowest level since 1992.