In case the link is broken, the analyst says this is why the price of oil will remain in the current trading range:
This week has been a near perfect storm for oil bears, featuring a series of reports pointing to falling demand:
- A third-straight monthly drop in Chinese manufacturing activity
- A steep rise in U.S. gasoline inventories to the highest level in 10 months
- Hovensa LLC saying it will shut its St. Croix refinery, due to falling demand
- The International Energy Agency's report that global oil demand fell by 300,000 barrels per day in the fourth quarter, the first decline since the financial crisis of 2008-09. The IEA further warned of weak demand in 2012 as the global economy cools, due largely to the crisis in Europe
The analyst brought up numerous reasons why the price of oil will remain near $100, but he did not mention the most important recent headline and the most important trend.
Most important recent headline: Saudi Arabia has set a $100-price target for oil (that would be about $88 for WTI).
Most important trend: closer relationship developing between Saudi Arabia (largest producer) and China (largest accelerating consumer). China can afford higher-priced oil (with all its US dollars) and China has an enormous appetite.
So, nothing new: expect a lot of volatility, but the trend is obvious.
By the way, Canadian oil sands, largest reservoir of oil outside the Mideast, is not profitable below $60. The Bakken is robust above $40 according to one operator in the region.