Oil Price

There is a welter of arguments and rumors concerning both global crude oil demand and supply 

for 2016. Rather than get buffeted by all the issues, I am content to follow the well worn seasonal

annual pattern for now because it has been working recently. The seasonals call for a rally over

the second half January (now nearly complete) to be followed by another sharp leg down in Feb-

ruary to what could be the annual low. In late February, refiners begin to ramp up for the spring

and summer driving season, and the oil price enters a period of seasonal strength that runs through

September. From a purely seasonal perspective, this is the time to be long crude. 

Seasonally speaking, crude could fall as low as the low $20s bl. over February before rising demand sweeps the price higher. As an example, crude rallied from $45 to $60 over this period last year before surging supply sent it lower. The next six odd months should give us a better test of the supply /demand balance and whether rising output will squelch any plus from the demand side.

In the meantime, oil remains in the grip of a powerful bear market, and, for the short run, would 

have to clear $35 on the way up to give a bullish case any credibility. WTIC Daily