Verleger on high oil prices and demand destruction

I don't quite agree with the prediction towards a hydrogen economy but it is interesting to hear about the demand destruction of gasoline usage.  Mind you this conversation is about US demand. Add in emerging demand and you may see a different picture in total

Video of Verleger on gasoline consumption, heavy versus sweet crude, diesel versus gas costs --
(I would embed the video but it autoplays)
September 7 on Bloomberg

Philip Verleger on Oil, Natural gas, the Saudi perspecitve and more

A 30+ minute podcast of Philip Verleger interviewed on Bloomberg Radio.  (click the little play button next to the date)  A good overview of the oil, natural gas markets, the Saudis, and more.  He touches on the current use of tankers for oil storage, Exxon's purchase of  XTO, trade balances and the Chinese.

I have been following Mr. Verleger for a while and it is refreshing to hear an analyst say he was wrong.  Predicting the future prices of assets is always very tricky but he at least admits it.  He does reinforce that the inbalances causing him to predict low oil prices in 2009 are still there and do not appear to be abating.

Refining margins are really low

From Platts (2009 September 29) , quoting Verleger:

"Verleger points to a weakening 3:2:1 crack spread on the NYMEX, which settled at $2.28/b on September 25, the 69th smallest of 1,239 observations dating back to January 1986. "[I]t is in the fifth percentile...This is bad, very bad," he said.

Verleger cites not only poor product demand but mounting global inventories of distillate and gasoline."

If the refiners cannot make any money refining, who will buy all the oil?

You can play with the data shown above at Bloomberg

Verleger on oil

Philip Verleger has some interesting things to say on why we had a spike in oil prices last year and when it could possibly happen again.

Philip Verleger, February 19,2009 at UCSD 59min 25sec

While it is an hour long presentation I strongly suggest watching it if you are interested in the energy markets.

The gist of his talk is how environmental regulation changes regarding low sulpher diesel excacerbated energy prices in 2008. The upcoming cleaner requirements for low sulpher shipping fuel may possibly create a simliar situation by 2020.