Oil price bulls are breathing easier this week. Crude
has held support around the $60 bl. level and has bounced
to the upside, buttressed by rumblings of concern by OPEC
and the newly fashionable idea that the US has finagled the
crude price down temporarily to support Republican re-election
chances in November. There is also talk that Iran's nuclear
plans will resurface soon as a hot item that may spark some
buying.
Interestingly, crude is just entering its weakest seasonal
period. Moreover, seen in a wider time frame, the outlook
for crude supply / demand is not favorable for the bulls
without incidents that might trigger panic buying, as inventories
remain very high. I would also have to say that I believe
there is better support in the low to mid $50's than at $60 bl.
But, oil is oversold and we cannot begrudge it more in the way
of a bounce. Over the next couple of weeks it could go to the
$67-68 area without violating the downtrend in place. As I
say, "How is your luck?".
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