why would china eliminate subsidies? they have inflation of around 8% and keeping gas at around $2.50 a gallon keeps inflation from going to double digits. dont forget they have a trillion in reserves so can afford them. if they ever eliminated subsidies, it would probally be after the olympics. india could not afford it anymore and in china all the oil compinies are owned by the government
oil futures is in a speculator bubble . Just like tech ,stocks real estate . IT will pop when something better comes along .
Actually, the opposite is true. "too much demand" would make refiners run at 100% capacity. They're operating at 88.6% Decrease in utilization rates occurred across all PADDs, so the decrease can be attributed primarily to a drop in demand as opposed to shut downs for maintenance. (PADD stands for Petroleum Administration Defense District). "too little supply for too much demand"- Wrong again. the world has plenty of oil. In it's annual report, Exxon reports 40 years of proved reserves -- a situation that certainly would not light a fire under the company to go out and confirm more of the reserves they have already identified, but not fully quantified at market prices (proved).
Low refinery utilization can be attributed to outages, required maintenance and, most importantly, declining crack spread. Why run an old refinery at a rate that requires OT for maintenance when you aren't getting paid for it? The last inventory report showed a rise in gasoline demand, not a decline, as I recall. No doubt current prices will put a dent in gas demand over time, just not yet.