If we get a normal winter, we'll probably have enough inventories, but if we get a very harsh winter, inventories could collapse to unseen levels. The oil market would be very jittery with any supply disruptions.

There isn't the spare capacity to make up for the missing production in the Gulf of Mexico. OPEC used to have 4 to 5 million barrels of spare capacity. That's down to about 1.5 million barrels a day this year.

It doesn't matter that the government opens the strategic reserves because there is very little slack in the refining business.

Nigeria has always been a difficult place and now they have targeted the offshore platforms. They've never done that before. Obviously, that's very dangerous.

With oil prices at $60 a barrel it was a foregone conclusion they were not going to cut. If you do see disruption from Nigeria, if you do see disruption from Iran, the oil price will go substantially higher from here. So OPEC is reluctant to start turning the taps off just now.

People will still watch gasoline because of maintenance and subsequent specification changes.