Oil Investor's Business Part II

Crude has seen 22 Bull Markets since 1986 (according to Barron's; rally of 20% or more coming after 20% or more decline). The average bull market for oil lasted 242 days and gained on average 68%.
As of late, the current bull run, "is twice as long and twice as strong". Crude has risen 136%+ since Jan 18, 2007 (465 days+).

The average bear market for crude oil lasted 125 days with a drop in prices around 32%. When a decrease in oil prices, it increases disposable income, which is "welcoming" news for discretionary companies, and lifts their stocks on average 10%. When Oil retraces (or when prices drop and crude enters a bear market) other average increases are financials adding 9.5%, transport stocks adding on average 9% and the S&P has gained on average 5.74% in a crude oil bear market.

Energy stocks that have gone up the most during the current oil rally will probably get hit the hardest," say analysts. Some have added as much as 120% to 150% since January 2007.
-Barron's, April 28, 2008.
What if OPEC cuts output, or if there is continued turmoil in Iran, conflict in Nigeria, et al.

My thoughts, Oil prices were below $100 dollars per barrel since the beginning of time, now that is major support for oil bulls. Thanks to the stimulus checks that most shall receive, now we can afford more expensive oil and other commodities.

But, if the FED does stop cutting rates (equities will perhaps already seen the worst..?) after this weeks monetary policy meetings, many think the dollar will strengthen, inflation fears will diminish and investors will take money out of commodities, pop the bubble and turn bullish on stocks..but, as long as India is growing, Russia and Japan demanding and places like China, Chile and Brazil developing, its not as clear as many may think, lets think long term.

As I depart to continue studying for these finals, Crude is below $115, in reaction to inventories data. From IBD this morning, "Nigerian unions restarted talks with Exxon Mobil to end a strike that has shut nearly all the company's output."
Supply and demand.

MPM