IEA sees oil stocks trending lower
Amid sluggish product demand growth, poor refining margins, decreased compliance with output quotas by members of the Organization of Petroleum Exporting Countries, and the risk of a double-dip recession, the price of oil recently has hovered around $30/bbl. While it's widely thought that market psychology surrounding a war premium for a possible Western-led conflict in Iraq has driven this price hike, the International Energy Agency asserted that those who argue that market fundamentals are weak underestimate the disconnect between crude and product stocks.
In its latest report, Paris-based IEA said that, although product inventories are comfortably in the middle of their 5-year range in terms of days of forward cover, crude stocks are low and are trending lower.
The agency's preliminary estimates …