Energy Prospectus

Oil price may react to what the Swiss did today. Oil trades in U.S. dollars. When the U.S. dollar goes up the price of oil goes down.

See: http://www.marketwatch.com/investing/index/dxy/charts

Spike in dollar accounts for at least $20/bbl decline in oil price.

Oil up, dollar up

Oil jumps as IEA sees signs market ‘tide will turn’

LONDON: Brent crude oil rose more than $2 to almost $50 a barrel on Friday after the West's energy watchdog forecast the market downtrend would end, although analysts said a strong rebound soon was unlikely as global output continued to outweigh demand.

Oil prices have dropped by nearly 60 percent since June as production around the world has soared, outstripping demand at a time of lacklustre global economic growth.

The International Energy Agency (IEA) said oil prices could fall further before they recovered, but there were already signs lower prices were beginning to curb production in some areas, including North America.

further.....

http://www.brecorder.com/markets/energy ... turn’.html

I have been in the upstream business for over 35 years. The spikes and dips in oil price ALWAYS overshoot the mark (thanks to the "Evil Speculators"). In my opinion (which I wrote in this article: http://oilprice.com/Energy/Oil-Prices/T ... -Over.html ), is that the price is $5 to $10 below where it should be based on the fundamentals. Yes, the market is currently oversupplied, but the word "glut" is way over used.

The global market for refined products is 94,000,000 barrels per day.

I think the price of WTI will flop around in the $50-$55 range for awhile. When it becomes crystal clear that U.S. oil production will decline in the 2nd half of this year, the price will move higher.

but the word "glut" is way over used.

Agree on that.

Time to buy here? I'm still in the state of shell shock over OAS and others, and know the 'buy when blood is in the streets' mantra. Tough to overcome fear and paralysis.

I suppose a gradual approach is the best.