Fear grips oil market

Bloomberg: ``Oil Rises Above $57 as Demand Growth May Outpace Production''

Here is how one analyst puts it in this story:

``There is no question that the market is going to $60,'' said Kyle Cooper, an analyst with Citigroup Inc. in Houston. ``There is a lot of fear and hype about the possibility of us running out of oil and it has stuck, attracting investment.''

An earlier Bloomberg story suggests that meeting summer gasoline demand in the thirsty US will be nip and tuck:

``This is the time of year when everyone is going to be freaking out,'' said Mark Waggoner, president of Excel Futures Inc. in Huntington Beach, California. ``It's going to take six weeks for any of OPEC's oil to actually get here and by then it will be the end of July.''

And it may be a long, cold, expensive winter in 2005-06:

World oil consumption peaks in the fourth quarter when refiners begin producing distillate heating fuels for the northern hemisphere winter.

``We're not in bad shape on crude and we're not in bad shape in terms of gasoline,'' Excel's Waggoner said. ``The distillate stocks are looking a bit low'', said Waggoner, who said oil will reach $60 by the end of next week.

Heating oil futures, a proxy for diesel and jet fuel, surged 19 percent the past month on concern rising trucking and aviation demand will strain refiners' ability to store heating fuel for winter.

Are you enjoying life at the point in history near the peak daily petrol production rate?