Will Storage Bloat Finally Bring Energy-Price Bust? (Barrons)

Following previsous blog oil theme, this is another good article from Barron's that shed some light into high oil prices.
Investories of oil & gas are at all time high (or what historically be termed as a glut). Nevertheless, the measure of oil & gas inventories which usually gives direction to the trajectories of oil prices seem to have broken down according to analysts. In the past, there was a clear correlation between days of forward-demand cover represented by OECD commercial-oil inventories and changes in prices, an analyst from SG reported. This model, he added, does not work any longer. This is because the margin of error is very small now (any incident affect prices more severely) espcially as the safty valve (OPEC) is pumping at max and refining capacity is stretched thin.
But with prices sky high and with the sharply upward-sloping term structure in futures contracts providing a strong financial incentive to store both oil and gas, there's the possibility that energy companies may overdo their stockpiling, setting the stage for a price crash -- especially if high prices eventually choke off demand. "The futures market is going to make the physical market prove it first," says Schick. "It's logical that the market's headed in a pretty bearish direction."