Oil market well-supplied; short-term factors driving prices

Oil market well-supplied; short-term factors driving prices: IEA

London (Platts)--9Sep2004


World oil markets are currently well-supplied, with OECD crude stocks in the
middle of their historic range and US gasoline inventories above the average
of the last five years, the International Energy Agency said Thursday. 

The sharp fall of $8/bbl in WTI crude future seen in late August and the
subsequent rebound of $2/bbl in the following two sessions show that
short-term factors are driving prices, as "fundamentals do not change that
quickly," the IEA said in its latest monthly oil market report. The IEA noted
that some analysts believe the market is faced with a new paradigm, consisting
of a shift to sustained higher prices as a result of a lack of investment in
upstream and downstream capacity and changes in non-OECD demand. "The counter
view, and our position,...argues that today's market is well supplied with
crude," the IEA said.

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