Oil Price

I have been trading the oil price for over 40 years. There has been more good fortune than ill. Yet,
over the past 15 months the track record on calling price has been no better than 50%. My estimates
for global oil demand have properly exceeded the consensus but the increase of supply has been well
above my estimates. Nowhere in time has this been more true than the past five months, when my
guess of a seasonal peak 2015 price of $70 a WTI bl. was way off the mark. Historically, when players
get the price of oil wrong, it is because of oil demand forecast errors rather than bad guesses on
supply.

Looking toward 2016, my guess has been that crude would average in the mid - $50s for the year.
I am not going to expend time trying to defend this now, but concentrate more on the oil price techincals
instead. I have made shifts in focus like this in the past and often they are helpful. So, let's look at
WTIC Weekly

Oil has been in a deep bear market since mid - 2014. The bear has been confirmed this year because
oil price rallies have failed to take out the 40 wk. m/a on two occasions so far. The price is modestly
oversold against the 40 wk m/a, and is turning to oversold on the 14 wk. RSI. There has also been
a positive but inconclusive turn on MACD. Note too that oil stock traders have turned a bit more
positive on the market in recent weeks ( XOI oil index in the top panel). Expectations for crude
have turned up in mild fashion and at this point, it is important from a technical perspective that
crude hold support at $40.

I have done my mea culpa and I am probably going to stick with this intermediate term perspective
chart in the months ahead.