-Venezuala production well down taking 2.5-3 mbl out -Iraq Production down about 1mbl -War fears and assorted moslem terrorist jitters - Seasonal high demand period.
Future factors that will lower prices
-Venezuala's strike ends bringing back 2.5 - 3mbl + extra if they try to make up for lost production. -Iraq situation resolved increasing iraq production by 1mbl + -OPEC increases quotas by 1.5-2mbl -Rising non-OPEC production -Falling demand brought about by the present (high) price of oil -Falling world demand due to economic slowdown
Therefore we could have increased production in the order of 6mbl + hitting the market during the usual low demand season for oil compounded by a cyclical drop in demand caused by a slowing world economy.
Should the above occur we could be headed back to the same $10 pb price that was brought about by OPEC hiking quotas when the Asian economic crisis was taking place.
