Economic Forecasting: Oil

It is a relatively common belief that the global economy will turn around by the end of 2009 with oil helping the rebound along. However in some opinions the oil business doesn't look to be at its finest right now. Merill Lynch expects that the demand for petroleum will fall 5.2mm b/d below capacity this year. It is also expected that refining will continue to be a low margin buisness, as the world has a much larger oil refining capacity than needed and we currently have 85 million barrels worth of oil products sitting in floating storage. There is a spare capacity of 20% this year as opposed to the 5-6% of years previous. So maybe it is not looking so rosy for the oil industry.