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THE BREAKING POINT OF OIL'S BULL MARKET
Eight months ago in this column, we claimed the market was reluctant to pay more than $75 for a barrel of oil, and would push it down whenever prices strayed higher. This threshold had held for around two years. Oil just couldn't climb above $75 and stay there.
Right around that time, oil decided to trash our thesis and head directly for $100. Now, with a slowing global economy, we wouldn't be surprised to see oil head back to its old comfort level.
It's impossible to predict the price of a commodity with so many political inputs, but we're guessing oil needs a "cooling off" period before it makes another serious run higher. After all, the black stuff climbed 58% in 2007.
But oil bulls can keep this in mind: Today's chart shows the great bull market in oil since 2002. As you can see, oil could fall all the way down to $70 per barrel and still be in the confines of a cozy six-year uptrend.
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