Oil Prices tumble on fears that China is slowing and the Fed did not do enough. But look at the bright side the era of high gasoline prices has ended. In fact the high price that you paid for gasoline this year may be the highest price you pay for many years if not forever.

Of course first things first, the Fed was the main focus of this market even after the Energy Information Administration reported a larger than expected increase in crude supply driving them to a 22 year high. Yet the power that the Fed has when they can print oil into a bull market regardless of supply kept the market from totally falling apart. When the Fed came in with a relative meek extension of Operation Twist the oil market was a bit confused. Now one might think that if the Fed only extended the Twist they may feel a bit optimistic about the economy. Instead in Ben Bernanke's press conference the Fed actually lowered their outlook for growth. With lower growth out of the US and disappointing manufacturing data out of China not to mention a global glut of oil supply can anyone give me a good reason for this market to rally.

That of course makes the data coming out of the Energy Information Agency even more bearish. The EIA reports that crude supply increased by 2.9 million barrels driving inventory to a stunning 387.3 million barrels. Supply in the Gulf Coast and Midwest surged as storage tanks were being filled up with oil coming not only from the South but from the North. Cushing Oklahoma had a relatively modest build of 360,000 barrels as the Seaway is moving oil to those big massive refinery runs.

Gas supplies rose 943, 00 barrels and RBOB futures continue to seal off as the era of high gas prices come to an end. With the combination of new supplies of oil and an aging US population and the permanent demand destruction we have seen means that baring a major disruption of global supply gas prices have put in what should be a historic peak. A weak economy and the move towards fuel efficiency and viable alternatives like natural gas on the horizon the likely hood of spike exceeded this year's high are becoming increasingly unlikely!

Of Course Mother Nature could make me a liar! Down in the gulf a disturbance has a 30% chance of becoming a tropical cyclone! Stay tuned!

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Phil Flynn