Even considering higher demand, there's been a rapid growth in gasoline stockpiles.

Nigeria isn't enough to continue to push crude oil prices higher due to current ample supplies in the U.S.. Gasoline inventories remain above the upper end of the five-year range since early February.

With oil at this price level, we can definitely expect a cut in output. OPEC was only barred from doing so previously because of higher prices.

The latest energy department statistics were very bearish. Coupled with ample supply in crude oil and distillates, recent rapid recovery in gasoline inventories will continue to weigh on the market.

Given the intensity and the path of Katrina, damage to oil infrastructures in the Gulf of Mexico is forecast to be more serious than Ivan. With current production losses, the gasoline market will continue to be tight in the short run as summer driving season comes to an end.

The IEA release is obviously a bearish factor, a large portion of which consists of crude oil. Given the capacity constraints, the effect of additional barrels of crude oil seems limited and the amount of gasoline will be insufficient to ease current supply tightness.