When bullish is not just bullish enough.
Oil looked a bit tired to start the week, unable to build on early gains inspired by a weekend of what should have been exceptionally bullish news. Whether it was the strong economic data out of China or the increasing tensions around the globe with regards to Nigeria and Iran, or the ongoing oil price dispute between Russia and Belarus, the bulls should have continued to have their way with this market the way they had the week before. Of course when a market fails to rally on bullish news it means more than likely the bulk of the news was priced in or in this case perhaps overpriced in. Traders anticipated that the nasty cold had played a big part in pumping up the price of oil. This weekend was the weekend that was supposed to be the beginning of the new ice age, so some traders might have been shocked that temperatures could actually go up. Or maybe they are just be reminded that despite the cold and the strong demand out of China the globe still has ample supply.
As for the Russia and Belarus situation, Dow Jones reports that Russian oil supplies are continuing to and via Belarus to Europe despite the two countries' failure to sign an agreement for 2010, Belarus' state energy firm, Belneftekhim, said Monday, according to the RIA Novosti news agency. The market is also raising questions about the data out of China and in a sense it was priced in as oil went on that relentless rally. The bottom line is that the market action was not what the bulls had hoped for.
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