Oil Price

The oil price has maintained its rally since mid - March. The rotary rig count is now down 50%
y/y and speculation that large excess US crude supply might end before long has continued to
strengthen. The oil business has now entered a period of mild seasonal weakness following the
strong initial driving season gasoline build. Long side players are now without the strong
seasonal and now have an oil price that is registering the first overbought reading since prior
to the crash. $WTIC

It is interesting that the oil price at $60WTI is fast approaching the bottom of the long term uptrend   
channel dating back to the late 1990s. With oil now overbought, some players may look extra
carefully to see if the bottom boundary (now $62 bl.) might serve as new resistance or treat it as
a non - issue in the expectation that oil is returning to its long term wide uptrend range.

My guess has been that oil could reach $70 at the end of Sep. '15 as a seasonal peak on improved
demand. It is still very much a guess too, since my expectation that global economic demand
would firm up as 2015 progressed has yet to be confirmed.

The shale oil business allows drillers to re-start drilling and production in comparatively short
order. Thus, with the oil price now much higher now than at the bottom of the crash, traders need
to stay vigilant for that day out there in time when the rig count stabilizes and then begins to
recover as these events may act as a drag on the oil price.