NEW YORK (Real Money) -- The bulls on oil better own a lot of storage space, because right now it can't be refined fast enough and there's no place to put it, unless you rent tankers; and even then, judging by the day rates, those are full, too.
Oil isn't like other commodities. The producers of oil don't check with marketing and ask, "How much do we need right now. How is it selling?" They just presume a market. I am telling you, there isn't much of a market right now. Just producers still pumping.
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Why does it stop here? First, we don't know if it will. However, there is demand for the stuff right here as there was at $100, but every time it lifts, the futures get whacked to bring in cash flow.
Now maybe lots of storage will be built. Maybe the shale wells will run dry. But that can't happen until the rig count drops dramatically and the marginal producers go under.
That's why I say, wait for all but the majors, but remember they have little production growth to begin with.
There will come a day when it's right to buy. The numbers will have come down. The overleveraged producers will report hideous numbers and we will worry about their credit.
And then we will start to bottom. However, right now supply is out of balance with demand, which means that the producers have to call marketing and ask how much the market needs.