After 3-4 weeks of waiting for oil to drop convincingly below $40 for a buying opportunity we seem to have missed the boat on this rally. We see prompt Brent trading choppily within a $45-$54 range in the coming weeks and if forced to pick a side believe the market is closer to being a sell than a buy following a $9 short cover / FX / OPEC jawbone rally with scant fundamental justification. Given our skepticism that a production agreement will be achieved in September (Iran probably won’t even attend) at OPEC’s informal gathering, the recent strengthening of the US production outlook, reports (via Reuters) that Saudi Arabia is set to improve on its record-setting output effort in July and sky-high crude and product inventories heading into peak refiner turnarounds we think that the current move higher for oil is starting to look rich. Option […]