TIming of SLB

Oh, I almost forgot. I've been trying to time the entry into SLB last week but the oil markets have been more resilient than I thought. With the threat of a US slow down, I believed that oil was headed lower and with the so-called hedgies in the game the drop would be swift but alas my readings of the oil leaves were wrong. I keep reading reports about production shortfalls and capacity constraints that will keep the oil markets tight so perhaps we won't have a better chance to jump in.

I read something interesting today about peak oil and this longtime oil expert (Groppe) blamed the rosy predictions of the IEA for the run up of oil to $99. He claimed that their (IEA) projections of non-OPEC capacity additions caused many OPEC nations to throttle back on production this year leaving us with a shortfall due to continued growth in demand. He also thought that oil prices of $65-$95 was consistent with peak oil barring any geopolitical disasters. Apparently there are 15 million barrels of oil/day that are burned to produce electricity in Africa/Asia that would likely switch to coal/NG given the opportunity due to the increased cost of oil. This would allow this oil to be used in higher value uses like transportation.

Overall the oil markets have been quite volatile but have shown persistent support in the high eighties. I think if we're patient we might have a better chance to pick some up cheaper than the close of $97.