Oil and NGI am still an oil bear for all of the reasons posted earlier but I have had to temporarily exit to wait for the big pull back I see coming.
Logic and economic laws say that low demand and surplus supply will move price to the down side. The healthy market and intelligent market reacts this way. So what gives?
For those who say that the current price of oil is driven by a much anticipated economic turn-around (green shoots theory), I say let's look at NG. With the same general market conditions - demand inked to economic activities- we note the opposite price movement for the commodity.
I believe quite simply NG is reacting normally to supply-demand without the same degree of manipulation associated with fund speculation.. The sabre-rattling of regulators has paralyzed a major US NG fund so that they will not issue new units and this has had a ripple effect on the NG market - effectively removing manipulation and returning things to a supply -demand equation.
This is not what we see with oil and has caused a price divergence between oil and NG that is unprecedented.
Naturally, observant traders have seen this and jumped in with both feet to the NG bull camp only to get severely burned as it continues to react normally. Check out HNU board if you haven't already and you will feel the pain.
Speculation has and is moving the oil price away from its natural course... for now.
Drainman