Oil Price ($72.65 bl)

The foiled terror plot to blow up in-flight commercial
aircraft scheduled for intercontinental transit from
London to the US created concern demand for J-9 fuel
would fall sharply and turned a normally seasonally
strong month into a weak one for oil -- at least month
to date.

The crude price has bounced this week from an oversold
and must hold $70 - 72 over the next month to maintain
the fierce uptrend underway since the spring of 2003.
Crude has also dropped inside the upper channel line
for its advance running back to 1999. Crude has had
trouble holding above that latter line for long since
the year 2000. Importantly, the issue of whether crude
can maintain the super strong three year trend or will
slide back into a much broader trading range could
well be decided over the next two months.

From a long term perspective, the seasonal outlook for
crude strongly suggests weakness from now through the end
of October. However, that could obviously change if the
US hurricane season spawns a bad one that damages
production or if Iran and the UN Security Council tangle
badly in the weeks ahead. The point here is that some
special event or series of same will likely be needed to
keep crude strong through October.