OK, I am handing out candy for a bit (it's Trick or Treat time in Scotland, where they interestingly emphasize the "Trick" part). I want to address this one.

You appear not to understand the signals at all.

Says the guy who thinks "stocks are already so low", despite the fact that they are above their 5 year average. Look at gasoline stocks to understand what low stocks really mean. This also from the guy who has some trouble with probabilities, for thinking that getting even money on something that the market values at a 17/1 longshot is a "bad bet." More elaboration on that in a later essay.

Stocks have been drawn down from very high levels, where they have been since they recovered from Hurricane Katrina. At $90 a barrel, is it a surprise that refiners don't wish to hold as much in inventory? Don't forget, I have worked in refineries, and have a lot of contacts still there. I spoke with one about this today. She told me exactly what I figured; they are drawing inventories down somewhat, buying the cheapest barrels they can find, and are trying to wait out this price spike. That's one refinery, but I guarantee you it isn't the only one adopting that strategy.

I need to do a post on LP models that refiners use to guide their decisions. I think that would help clear some issues up. I see a lot of speculation about what's going on with refineries that is often incredibly far off the mark. Heck, I recently saw a post here where somebody didn't think there were any refineries in the U.S. that can process heavy, sour crude!

As far as the rest, that's verbatim from OPIS, one of the most respected names in the business.

The year-to-year difference in speculative longs comes primarily from the reweighting of the GSCI in August 2006, in which Goldman caused a massive selling of gasoline futures by all funds using the GSCI.

That's a nice theory, except for the little bit that August 2006 isn't between October 2006 and October 2007. Sort of like your theory that Saudi made a snap decision to shut down a refinery based on lack of crude. Even though they were making complex tie-ins during that shut down that take MONTHS to plan. I knew when you said this that while you might know something about the market, your understanding of what happens inside the fence leaves much to be desired.