What happened? Hurricanes Katrina and Rita disrupted production and added a risk premium to the price of oil. Events in the Middle East haven’t helped. That said, private inventories have increased by 11% since I wrote that column. The price of oil for future delivery now exceeds the spot price. This price structure implies that inventories are abundant. Barring further unpredictable events, it looks like we will finally see that $10 oil price drop.