The bullish oil price scenarios are giving way to what seems to be ever mounting supply. Mario Draghi failed to provide any real simulative hopes and we had a weak ISM nonmanufacturing data report that lowered demand expectations and so we have growing odds of a continuing price collapse. In the beginning of the year on my oil outlook, I said that oil would be in a range between $100 a barrel and $110. I said if the market feared that we would be on the verge of war with Iran we would be closer to $110 and if we were less worried closer to $100. It appears the market has played that call out almost exactly but now it seems that with Iran on the back burner and Iranian supply almost replaced by rising OPEC production, the odds are increasing that $100 a barrel may fall.

Of course with weak demand for gasoline my call that $3.00 a gallon gas was more likely than $5.00 a gallon gas that you can find online on MarketWatch Radio. Of course back in February when I made that prediction many were calling for $5.00 a gallon. The crude market was surging, refineries were closing and it seemed like the world was preparing for war. Yet the odds of war in the short term is unlikely and with the all the preparations that have been made ahead of a potential war, the risk of losing Iranian crude has largely been negated.

Consider for instance the announcement by the UAE that their long awaited pipeline to avoid the Straits of Hormuz. Reuters News reported that, The UAE's strategic oil pipeline for bypassing the Strait of Hormuz is complete and exports are expected route out of the narrow strait which Iran has threatened to block as western pressure to limit its oil revenues has intensified.

About Fracking Time! The Wall Street Journal reports that the Obama administration will soon issue sweeping new environmental-safety rules for hydraulic fracturing on federal land, setting a new standard that natural-gas wells on all lands eventually could follow. The rules, which are likely to be unveiled by the Interior Department within days, are designed to address concerns that the method of extracting natural gas known as fracking can contaminate groundwater. Among other things, they create new guidelines for constructing wells and treating waste water, according to a draft of the proposed rules reviewed by The Wall Street Journal. At the same time, the department loosened a proposed requirement for companies tied to disclosing the chemicals they use to extract natural gas from the earth, after the industry complained an earlier version would slow drilling too much. The change, which disappointed environmentalists, is a fresh sign that the administration is heeding industry concerns after Republican complaints of overregulation. Last month, the Environmental Protection Agency gave the industry two years to comply with new air-quality standards for oil and natural-gas wells after the industry complained it would be difficult to meet new standards. A must read!

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