The big question is when India and China begin to grapple with their subsidies.

Iran and Nigeria are uncertainties that hang over the market and can change the fundamentals very quickly.

It is dangerous to confuse children with angels.

There are concerns that the longer $60 oil persists, the greater the pressure will come (on Asian governments) to cut subsidies.

Historically, spare capacity of 1 to 2 million b/d is still very low considering all the uncertainties on supply in Nigeria, Iraq, Iran and the Gulf of Mexico and it means there's not a huge margin of flexibility if anything should happen to those producers.

There is some prospect of fundamentals easing modestly this year. There could be more spare capacity this year than last year.