Working out here in the Middle East, I have made some, what I consider, very important observations which must affect the oil price in the medium to long term.

1.) There are a lot of projects being cancelled or postponed indefinately in the oil and gas sectors whilst the prices are down.

2.) There is a huge increase in the use of their own oil and gas resources and less will be available for export. They are slowing down as far as growth is concerned in non-oil sectors but not significantly so.

3.) The largest oilfields in the world are declining more rapidly than expected and the make up from non OPEC fields is not happening.

4.) China and India are slowing down but are still growing at a significant rate.

5.) Alternative energy is again coming under pressure due to the abundance of cheap conventional. Shelving of these projects is inevitable.

I fully believe we are in a down cycle which is temporary and all of the above will eventually promote and upward drive in prices of all commodities and not just oil. Counter to the above we currently have a decline in the demand side which I hope will not prevail for much longer. Sentiment has a lot to do with the current declines in stock prices. I would love to grab more CLL as these levels but the local stocks here in Abu Dhabi are at unbelievable values right now which is why I am concentrating my spare funds here.

GLTA

Den