The world was preoccupied with growing Indian and Chinese Oil consumption, Peak Oil and a never ending demand for refined petroleum products.
With drastically slowing GDP growth rates the world over, prospects for Crude Oil are not too bright.
Prices are expected to slide further as inventories build up.
Longer term I am an Bullish on Crude Oil, and would exercise caution while taking aggressive short positions in Crude Oil.
THE END OF CHEAP OIL?
Analysing Fundamentals: While cheap credit and availability of financing may have encouraged almost ''wasteful'' oil consumption recently; on the supply side - there has been no addition of ' Easy Oil' to exising oil fields. Moreover, recent discoveries like the Tupi oil field off the coast of Brazil are unviable at current prices.
As the world battles deflation (read: unemployment + bank failures + debt defaults + credit contraction), geopolitical tensions are likely to flare up.
The USD and other 'paper' currencies are battling a toxic cocktail of bailouts & stimulus packages. Currency Volatility and Currency Crisis could result in higher nominal Crude Oil prices.
I am keeping a close watch on Crude Oil prices and will put up some more analysis on the Gold-Oil Ratio soon.
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