Crude Set for a Short-Term Slide

Legend has it that macabre cartoonist Charles Addams, now better known as the creator of The Addams Family than for his long-running work for The New Yorker, kept a single cartoon in his desk drawer to shoo away editors around deadline. It depicted a maternity ward nurse handing a swaddled newborn over to its father, whose response was the caption, "Don't bother wrapping it, I'll eat it here."

Writers on commodities and futures markets can follow a similar strategy by keeping a continuously updated article on the crude oil market on their hard drives, ready to launch with a single click. But this would be the intellectually lazy way out, a parallel to the ever-popular "Is the market going to go up or down?" story.

But so saying, I was a little surprised to find I had not done a little review of the fundamentals of the petroleum industry since July 2004, when I concluded the market was going to go higher. The ongoing retreat in prices and margins demands an update. ...