Oil oil everywhere

Oil has fallen more than $15 off of its peak of $78.65 on August 8. It is currently trading at $64.20 as of 10:20am on Wednesday, Sept. 14th. Brent is down more than 20 percent from its peak, meeting the technical criteria for the start of a bear market.
"Even though we've retraced certain percentages similar to this, it definitely seems that the market is different now," says New York-based ABN AMRO broker John Brady. "Other times I saw (the corrections) leading to great buy opportunities, but I don't necessarily think that this time."

The drop through the 200-day moving average last week and this week's fall below a three-year trend line -- intact since mid-2003 -- both send worrying signals.

Unless we see a large disruption in oil, i.e. war with Iran, or a hurricane hitting the US gulf coast, oil could steadily drop as we go through this price correction. Another factor in the falling prices are the geopolitical concerns are dissipating somewhat. The Israeli war and Iran backing down from its quest for Nukes are easing the minds of traders and investors.

Great news!

http://biz.yahoo.com/ap/060905/major_oil_discovery.html?.v=5

OSLO, Norway (AP) -- Tests of a deep-water well in the Gulf of Mexico could indicate a significant oil discovery, three companies announced Tuesday, in the first project to tap into a region that reportedly could boost U.S. oil and gas reserves by as much as 50 percent.

This is a great find, this means a lot for the global oil markets, but even more for the US markets. Hopefully this field will prove to be of significant size that will allow the US to stop having to rely on the geopolitcal hotspots of the world for energy.

Oil prices dropped slightly after this was announced, but they will not fully price in this discovery until the field sizes are confirmed. Keep your eyes peeled for falling gas prices!