Oil Price -- More Thoughts

1. Folks in Saudi Arabia are trying to plan a  "day of rage" in country on Fri. 3/11, perhaps after
Fri. prayers. Given SA's pre-eminent importance as an oil producer, traders may well try to keep
the volatility going in the market through mid Mar. The Saudis have turned pro-active in handing
out fiscal and monetary goodies to quiet discontent in the meanwhile.

2. The guys in the trading pits are kiting the price on Libyan developments even though production
there has been scaled to a minimum with a Saudi production "patch" commitment in place. So the
oil price lilly is being well gilded now on no new relevant info.

3. Over the past decade, the oil market has shown enough price volatility to support a further
upside move in price to $110 or slighly more per bl. without a drastic, more enduring change
in the calculation of excess capacity at the wellhead. There can also be $25 - 30 bl. declines
that follow on to a speculative run. That has been the nature of the beast.

4. Investment manager and trader discipline is starting to show signs of ebbing away with the
oil and oil services groups. Consider the $OSX services composite which is now at a 37%
price premium to its 200 day m/a. ($OSX). Dumb stuff.