SoSuMi

...is to global demand for crude. Last year we set a record of sorts for low gas and diesel supplies during the summer driving season. This year looks to be worse (unless we cut back on our summer road trips).

Last week the Russian Ministry of Nat Resources said that their production will be down for the year. I expect that to continue, considering their proven and probable reserve levels.

And check out this quote:

"Saudi Arabia - RIYADH (Reuters) - Saudi Arabia's King Abdullah said he had ordered some new oil discoveries left untapped to preserve oil wealth in the world's top exporter for future generations, the official Saudi Press Agency (SPA) reported.

"I keep no secret from you that when there were some new finds, I told them, 'no, leave it in the ground, with grace from god, our children need it'," King Abdullah said in remarks made late on Saturday, SPA said."

With that statement Aramco supposedly cut production down from 9.2 mil/bpd to 9.0 mil/bpd.

I believe that the speculation in crude merely reflects the tightness of the global market.

And the ULSD mandate totally sucks as natural gas inputs are required. You probably know the US nat gas situation is on the edge of becoming critical. Canadian production isn't much better. This is another reason that I suspect that ULSD supply could be very dicey. Wish we could settle for the plain old low sulfur diesel.

I'm expecting crude to hit $125 or better by the end of the year. At least on gas we're still getting a deal compared to most Europeans.