Oil Price

The oil price has continued to sink in recent weeks, closing today
around $113 bl. Strong indications of a global slowdown that is
still in the intensification phase have aroused concerns that the
oil market may come back into more equitable balance reflecting
slower demand and conservation efforts. Oil is moving into a
seasonally weak period now, and without surprise supply or
demand developments, it is reasonable to guess that the oil price
could decline to $90 bl. by late this year.

The fabulous overbought that we saw earlier this summer has
been eliminated, and the market is neutral intermediate term as it
approaches its 200 day m/a. Oil is getting oversold on a short term
basis and that has traders looking for a bounce off support at
$110 (chart link below). The $100 level is very much a pivotal
one for oil, but there may be a short covering rally before that
level is tested. Click for chart.