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Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Thursday, September 07, 2006

Oil Comment

The oil market is trading well down from the $70-72bl
needed to sustain the powerful uptrend underway since 2003.
As discussed prior, this is a weak seasonal period for oil,
but the dip is a reminder of the speculative arc of pricing
over this period, as players anticipated hurricanes and
varied geopolitical difficulties seen as bullish for oil.
We may get the storms, both in the Gulf and with Hurricane
Khameini, but take this little dip as a reminder that with
oil cover stocks at multi year highs, processors will
crush the market if they cut back further on disaster hedge

The weekly chart has turned bearish, taking out support running
back into 2005. Click.

The monthly chart I have attached needs some compression to show
perfectly how oil has just come off a parabolic up extending back
to the late 1990s when it was a mere $10 bl. This chart also suggests
that oil needs a natural or geopolitical disaster to return to
that powerful uptrend. Click.

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