Oil Price

The elongated volatility of the oil price has provided some nice trades for me over
the past couple of years, but the last 4-5 months of action have proven tougher in that
I have had a couple of long side trades that needed to be cut short with just nickel /
dime profits.

The "bomb Iran" story, a staple of early-in-the-year efforts by pit traders to gin up the
oil price for seasonal support simply did not materialize this year. Netanyahu won a
squeaker in Israel, Obama pushed the critical time for an Iran nuke bomb out to 2014,
and the last round of talks of EU folks with Iran ended sans threats and recriminations.
Finally, the US has been occupied with NK and the battery of threats from "Kim Young
Gun."

So, oil has wound up behaving contra-seasonally, with oil losing positive traction as the
Iran rumor mill fizzled after January and trader concerns shifted to prospects for slower
demand growth from China and a modest safe haven rise in the dollar. Daily Oil

I do not think China's economic performance so far this year has been disappointing as
many apparently have, and the recent strength in the US$ has been nothing to write home
about. Even so, the sharp drop in the price of oil this month calls into question my view
that oil should trade between $85 - $115 bl. this year, and it may be the wiser course
to step back from being as confident as I have been to take a deeper look at oil price
behavior especially since a price below $90 does undercut the mild cyclical uptrend in
place since late 2008. Besides, since oil is just mildly oversold now, patience may not
be a bad thing. Three Yr. Oil Price