The bulls are making a stand


The thing about oil is that it can only get beaten up by financial flows for so long. It's the physical market that runs the show and there is every indication that it's tight. US inventories are at a five-year for this time of year and there are indications that China and India are refining more than they're importing.

Even more interesting might be natural gas. The marginal supply of gas is a by-product of oil drilling. With yesterday's drop in oil, the outlook for more US drilling dimmed and today natural gas is trading at $3.85, near a four-year high.