No Time to be a Hero, says Eric Bolling

Are you trading oil in your spare time? The birth of the United States Oil Contact (USO-AMEX) has given us all a chance to embrace our inner Pickens.

But while T. Boone flails around trying to predict the next move, Eric Bolling has tucked his hands in his trading jacket, and is biding his time waiting to go palms out (that would mean sell):

When the flows of money reverse out of the oil play, there will be blood in the street for those still in the energy trade. There will also be opportunities to capitalize by following the flow from oil to the next big trade. I will outline that in my next column. For now, sit tight and watch this thing play out. Oil needs to find its next move but taking a position now is crazy.TSC

Yes, even a seasoned energy trader is backing away from the recent gyrations in oil. The price action this month would seem to be rather random to the casual observer, and we are churning around, albeit with wide intraday swings.

But Bolling is looking for the price to eventually crack, despite Nigerian rebels and Israeli F-15 practice sorties. And before you dismiss the Saudi's, listen to Bolling's take on their recent proposals:

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Can you make sense of the last 15 trading days in crude oil? If so, you are a better man than Eric. Or a fool.

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Putting a lid on some of that rally was the fact that the Saudi’s were holding a summit in Jeddah. Many producing nations were in attendance, including U.K. Prime Minister Gordon Brown, and our own Secretary of Energy, Samuel Bodman. All in all, 35 countries, 7 international organizations, and 25 oil companies were present. Quite an impressive group!

As expected, the producers blamed speculators and surging consumer demand. All agreed that we can manage this crisis with cooperation.

Then, the Saudis offered to supply more oil almost immediately-- very impressive, by the way. They also added that current production of 9.7 millions of barrels per day (mb/d) would be boosted to 12..5 mb/d by next year.

Most importantly, the Saudis said they could produce 15 mb/d soon after 2009 and even outlined which fields would provide the additional oil. That’s outstanding news for the world - just my $0.02

The world’s supply of oil is in both great shape and capable of increasing by several times the growth rate of demand. That alone will drive oil prices lower over time.

Making sense of the recent moves in oil might be impossible for pro’s like Eric and Dennis Gartman, but they have the street smarts to back away. And it sounds like they believe the next major move will be lower. From what level, and price, is the 64k question.

We will be following up with Eric in a Q&A session, a sequel to The Eric Bolling Diaries: A Trader is Born

If you have any questions for Eric send ‘em in to

And if you want to read more about Eric’s position on ethanol subsidies and smart cars, swing by TheStreet.com.

Bolling: Emerging Solutions for the Oil Crisis
The Street.com
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The content contained represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

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