Our feeling is that with the current surplus of physical crude that prices will continue to erode from here for the next week or two.

Compliance will improve from February levels, partly because the winter demand will not be there and also because of the fear that prices will slump if OPEC is not seen to be in firm control.

The U.S. will respond to this attack in some fashion and there remains a small fear that it may lose some Middle Eastern support as a result.

in the short term we could see a knee-jerk reaction higher.

You have to look at the series trend, and [prices] are definitely in an upward move.

OPEC has shown itself to be market-savvy by recognizing that waiting for the price band mechanism to kick-in could cause a slump well below $22 a barrel.