THE PERFECT CALM

 
 t. man hatter
The weaker the oil price gets the more you should become a buyer.

The concerns pushing oil prices lower are more economic than geopolitical at the moment. No big surprise here. Sending Brent crude, the world benchmark for crude oil, to a 13 month low recently during intraday trading makes the news a bit more tantalizing, giving headline writers something to get a grasp on.

Economic pundits are scrambling to reconfigure their demand projections, extrapolating from a weaker than expected second quarter growth number around the world. Factor in Japan, Europe and the Russian sanctions that have yet to be felt and you're starting to get the picture. The energy sky is falling.

And Libya just shipped its first load of oil since last year. North American energy output is soaring despite fracking, transportation fears and anti-pipeline protests. We like to heat and cool our homes but only if you get us that volatile, smelly burning stuff by Immaculate Conception or, better yet, some government regulation.

In Europe refineries are running at bigger slowdown rates. If demand gets any weaker it will most likely join Japan in another episode of the lost decade. We are daily hearing warnings that start with : "Unless....," dire stuff all. Copper, the doctor of all metals, swooned again over fears about Chinese demand coupled with China's lowering its oil import.

Beside the North American output, so the story goes, a glut of oil in the Atlantic Basin and North Sea are compounding things. West Texas Intermediate after falling to a new low rallied to close at $97.42. Iraqi oil once thought to be at risk looks less risky.

Suppositions that Brent could breach the $100 level soon make the rounds daily.

The whole thing reminds of a scene from a famous long-ago movie where a defense attorney is grilling a prosecution witness about the witnesses' point of view.

"Maybe from where you're sitting," the witness responds to the attorney. "But I'm sitting over here."

Now we don't know about you but from where we're sitting the story has all the elements of the "Perfect  Calm."  And we all pretty much know what followed that.