Last week oil kissed the $100 bbl. mark. It was an expensive
kiss, since oil has trended lower since. The weakness in the
market reflects the dawning of the realization that oil demand
could trend below expectations over Half 1 '08 on a rapidly
slowing US economy and the prospect that big stakeholders in
US growth such as Japan, China and Canada may face slower growth.
The rapid rise in the oil price over the course of 2007 undermined
the US economy and the Fed's efforts to provide stimulative support
as higher fuel prices were a major factor in depressing spendable
earnings in real terms.
Continue to keep a close eye on fuels prices over the first half
of the year.
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