Thursday, September 15, 2011
Phil Flynn: The Worst Is Over?
Is the market right ? Do we deserve a bottom? Well whether we deserve it or not the indicators from the technical side seem to be in alignment. Oil is gaining confidence and we are seeing signs that products are bottoming. Besides, the market is rebounding from sharply lower expectations from the likes of many of the major agencies like OPEC, the Energy Information Agency as well as the International Energy Agency. Besides lowering demand, the other key for the direction of oil may be when Libya's oil comes back to the market. The International Energy Agency says that, "As the fighting in Libya begins to wind down and the Transitional National Council (TNC) establishes itself as the internationally recognized government, it is timely to review the many factors that will affect the pace and timing of the restart of the Libyan oil industry.
The TNC leadership, which views oil revenues as a means to rebuilding the country, and participants in world oil markets, who continue to grapple with tightness in the global supply of high quality crude, share a common interest in restoring Libya's oil production and exports. When this will happen is uncertain and depends to a significant extent on the political, military, and security situation that will determine when companies can return to oil fields to repair and/or restart production. It is also worth noting that at the time of writing, only the European Union and United Nations had lifted sanctions on Libya; U.S. sanctions remain in place"......Read the entire article.