Feel You Need Your Mittens? Better Bring Your Wallet
Too
If you feel a nip in the air, wear a scarf. If it lasts, expect to get bitten
at the fuel pump this winter too.
That's the word from John Kingston of Platts, who's worried not
only about the weather but also about the world, especially the
failure of Iraqi oil production to get back to speed and the effect
that's likely to have on oil prices. "The biggest question
is the pace at which the Iraqi production will come back on line,"
Kingston says, noting too that "the nice ride" lately
enjoyed by OPEC has also been aided by reduced production from Venezuela.
Reduced production means lower inventories, and that means higher
prices.
For the shorter term, look to the temperature outside as autumn
wanes. Jet fuel is a distillate, Kingston explains, and distillate
inventories have been "very low." The other key distillate
is heating oil. "You can't separate one from the other."
"This doesn't bode well if we have another cold winter," Kingston
says, as refinery streams will go toward making heating oil for
homes rather than supplying the FBO ramp. "A cold winter,"
he warns, "is not good for jet fuel."
