Speculators were betting that Brent might have further to fall with the expected return to world markets within the next few days of Iraqi oil. At same point those that have shorted the market will decide to cover and when that happens prices will stabilise,' said a futures broker in London. The following day, the 6 th , Reuters announced a new low. It's a grim picture for oil prices. There's nothing right now to create a temporary floor,' said Peter Gignoux, head of the energy desk at broker Smith Barney in London.
Supply is secure and demand is failing.
Refineries throughout the region have cut back operations threatening to drag Middle East producers into a damaging war for market share. All the slippage on the supply side is for more supply, while all the potential slippage on the demand side is downards,' said Horsnell. Saudi Oil Minister Ali Al-Naimi told Reuters in an interview last month that markets would tighten if, as expected, OPEC members observed their new quotas. It will go on for a while yet. The timing of the OPEC increase in quota, as campaigned for by the Saudis, proves the lack of any strategic thinking in the kingdom.