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.

With steady supplies and high inventories, at some point prices are going to have to retreat.

It is a strange market at the moment and frankly I am surprised that the rise we've seen earlier in the week from the Ukraine-Russia dispute is still there. People still feel a bit shaky about what happened in Russia and Ukraine, and with Sharon ill and some uncertainty in Israel.

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.

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

Production should be up, and it should be up fairly strongly,