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
buying.

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.