FourBrane

Indicator Points to Higher Gas Prices - and 3 Potential Power Plays

This article's premise that lower demand worldwide will mean increasing margins flies in the face of economic fact. Markets experiencing decreasing demand always see downward pressure on margins. Oil is not exempt from economic law and it would take four or five years of reduced oil prices to lull the consumers back into buying Hummers and other guzzlers. Meanwhile, deepwater drilling, oil sands extraction, biofuels, etc. come at HUGE cost increases, so where would that leave supply?
When crack spreads widen it won't be because of falling demand; it will be solely due to internal industry pressure--you just can't keep producing for peanuts and maintain your equipment properly. So, at some point next year, expect to see spreads widen modestly on their own.