By Jonathan Barratt


From last week's comment to today's represents a complete reversal of our ideas. We have seen a 8% fall in the price of oil. The interesting aspect to the fall was that it all occurred prior to the weekend and we feel it was a very large order that went through the market. However, as a result of the elections in France and Greece all the bearish news that we felt was factored into the market is now being written about, US inventories continue to grow, China's soft landing is accelerating, and European woes continue to expand.

As we mentioned last week Europe represents only 9.4% of the top ten consuming nations, yet the majority of news supporting the fall originated from Europe. If you cast your mind back to the beginning of the year we started with an optimistic view of the economy and demand structure for the commodity, however as the year unfolded we became more bearish as to the effects the sovereign debit crisis