Thanks a lot for your interest. This is a very positive piece about oil, which many analysts – including myself – believe looks very attractive long-term. But I want to be as honest and candid as I can about the potential downside.

There is very good chance that oil will slide back to $40 a barrel somewhere in the short or medium term.

Alaron’s Phil Flynn is on the money when he said that oil prices are “possessed by the dollar and stock market.” We are enjoying some very positive sentiment regarding a recovery, as well as a market rally that makes it look as though risk appetite is returning.

But there is still very very little demand for oil at the present time and it doesn’t look like demand will make a particularly strong rebound in the near future.

It’s reasonable that some unforeseen, negative event could cripple this momentum and suck the air back out of the oil market. So, depending on what particular situation an investor is in, it might not be a bad idea to wait for a pullback.

As good as 80% compliance is for a month or two, I just don’t think that OPEC countries can afford to maintain that for very long. As some point, some of these countries are going to have to cheat to fund their budgets and prevent social unrest.

Can they hold out until the oil consumers’ economies recover in 6+ months?

Not mentioned was that funding revolutions in other countries also consumes much of their oil revenue. Half truths give wrong impressions to the uninformed and create doubt about the author’s credibility in the informed.

Assuming there is no bias by the author, proof reading for content could be a solution.