Oil Price

Back on 2/5/17, I posted that the oil price was quite vulnerable to a price correction given the
record level of speculative interest in the futures market and the parabolic recovery in the price
since early 2016, when WTIC crude made a multi year low of about $26 bbl. Since the 2/5 post,
the oil price has retreated by nearly 23% and the trend has turned bearish.  $WTIC


There has been a strong market observer consensus for some time that oil would trade through
2017 in a range of $40 - 60. The sky high speculative long side interest has been sorely dis-
appointed, and now crude is edging toward the bottom of the consensus range. Even though
speculative interest in going long crude is now far from the peak, it remains sizable. But, the
price is now approaching an oversold condition on RSI, its first since early 2016. The price
trend shown on the attached chart suggests a test of the $40 mark out ahead and if it does not
dive sharply below that level, oil could be interesting as a long.