Ron2008

Energy Affecting Food Prices

"Recent gasoline and crude oil inventory numbers came in well below expectations. Unless production is increased this trend will continue. Based on such figures, one has to assume that the global (and US) demand side "stories" are true."

Gasoline inventories came in low because,
1. It is normal for inventories to decrease at this time of year.
2. Gasoline inventories are the highest since 1999.
3. Refiners are making less because of high inventories and less demand.

Crude came in low because,
1. nobody, except the US gov, builds inventory when prices are at record highs.
2. With lower refinery usage, there is less need for crude.
3. Weather affecting imports. Mexican ports were closed.

Right now there isn't a shortage here. OPEC is correct.