The geopolitical situation and the switch to ethanol are aligning to keep prices high. If prices drop by a third we’ll be looking at $50, which wouldn’t have been a bargain a couple years ago.

I don’t know where the rally ends. There’s nothing on the horizon that points to a substantial fall in prices. It takes time for a supply response to occur.

The reaction to the IEA report points to how jittery the market is. Given what the system went through you can expect these moves. Supplies are still pretty tight.

Underlying the rise in prices is a strong world economy. The IEA is showing that demand continues to grow. We haven’t seen the demand destruction that was expected to occur after prices jumped.

Demand is better than expected. A gallon of regular unleaded gasoline is now under $2 a gallon in some areas, which is a nice drop from over $3 not long ago. This is improving sentiment...