UPDATE ON OIL

We understand there's much to do about oil owing to the recent Iraq situation, the Ukraine and other troubled oil-producing areas around the globe, not to mention the downward pressure put on the producers of the black stuff by the climate-change crowd.

With oil's recent surge above $106 a barrel, its highest level in nine months, concern is starting to mount. Anyone short oil in recent weeks is beginning to feel some pain just as the longs might do later if a calmer period develops in some of these areas.



Higher prices could put oil  producers in a more enviable position to search for more oil. It's also something the Russians firmly welcome given the sanctions. Not so with the EU. To be sure, others will say the recent explosion of the shale oil business will help soften the blow somewhat.

That's a real possibility but it's just as possible that the U.S. will  figure out some way to squander what resources it currently has in the shale beds. For such a much-hated commodity that federal and state bureaucrats and politicians love to feast on for a source of their fanciful spending ventures it's one of the great human hypocrisies. 

The point here is oil will remain a volatile commodity for years to come. And we're still buyers for the long term on any pullbacks.