Even before Katrina we felt the market was on edge, a very tight market, with very little spare (refining) capacity anywhere along the chain.

There is just no spare refining capacity around to deal with these losses. We don't have any cushion.

We need to address refining capacity,

You have all the elements to push the price up: high demand, tight supplies, tight refining capacity, interruptions in supplies, geopolitical tensions, Iran, Nigeria, etc.. The upside is bigger than the downside, so the money is piling in.

We cautiously welcome OPEC's decisions to make its full spare capacity available to the market and to commit to a future dialogue,

Supplies are ample and stockpiles are rising. We're still lacking spare production capacity but the market is fairly happy that there's a good buffer in place in the form of inventories.