2007 Fall shoulder season over now ??

oilluber · Heavy Crude Joined: Jul 03, 2005 Posts: 460

now that we have had a big correction in crude from
70's to 90's, the big shoulder season that the bears
were warning of back in August, is the bottom for crude put in for the
rally into the winter heating season ??

thanks in advance.

SD_Scott

Good one. These damn corrections.

pup55 · Expert Joined: May 26, 2004 Posts: 3679

I am one of those people who have been seeing a fallback. The reduced refinery utilization "should have" caused a reduction in crude oil.

The ongoing disaster in Mexico is part of the issue, these guys really have never recovered since Dean hit in September. Obviously, nervous traders worried about Turkey and Iran.

But you have to consider the possibility that this "is" the shoulder season, and what we will see next spring, when the real demand starts to pick up again, is a pretty significant period of even higher price spiking. Maybe another $20-$40 if my little gas price spreadsheet is right.

We will have a trial run of this theory in about a month. The refiners usually fire up their units for the month of December to produce some heating oil, and to gear up for the Christmas driving season, which last year, had fuel consumption on a par with June for a couple of weeks.