Could Goldman's 100$ oil call be a contrarian sell signal? Or this could be a very dumb post in a very short space of time.

Andy,

I've been taking all these "everybody's bullish on oil" contrarian calls with a grain of salt. Because I simply haven't seen it. I live in Texas and I don't see a lot of bullishness on oil at all.

But the Goldman call did get my attention. I would have preferred that they hadn't done that. However, Goldman is smart and they've made a lot of good calls in the past, so we'll see.

By the way, I can't remember if I mentioned this in the SMR, but Goldman didn't actually call for $100 oil. What they did was raise the upper level of their estimated range. I think it went from something like $55-$85 to $55-$105. That's much different than calling for $100 oil.

Larry

Larry,
I will have to agree with you that the general public is a long way from jumping on the oil band wagon. I do think that the more knowledgable investors however are all into oil very heavily. In my humble opinion its way to early for this much interest. Heck the bull market in oil is only a few years old. I also think OPEC is getting greedy and pumping to much oil at a time of the year when demand drops. (I'm sure they like selling $50+ a barrel oil) Every week we get bigger builds in inventory. If the statistics are to be believed we have 7% more oil in inventory now than last year. Summer driving season is still months away, cold weather is for the most part over, this should be the time when demand slows. Throw in the fact that Europe and Japan are in recession. Less demand too much supply. However on the gasoline side... with a shortage of refineries we can't refine it fast enough. So I think we're going to have a situation soon where oil drops and gasoline keeps going up. With gas prices high, I'm betting people will start cutting back. Hey I'm already riding my bike to the cliffs what with $2.75 for premium here in Vegas. How's that for a contrarian theory? I think, like you there's many years to go yet for the commoditity bull. So if it does come to pass there ought to be one heck of a buying opportunity later this year.

Gary

I'll tell you where there's too much interest. There's way too much interest in trying to pick the top of this oil market. That's what everybody's trying to do. I really have never seen anything like it. For the life of me I can't understand how that's useful.

We've sold a lot of oil stocks in the last couple of weeks. Not because we were trying to pick a top, but because the market simply took us out in a natural way. We also still own a lot of oil stocks. The market will decide when we get out of those as well.

Larry