Crude Oil Forecast: Continuation oil prices are

expected to fall at least to $32.50, which is

technical support from a rising trendline drawn

off the 1998 & 2001 lows. CLH9 first notice day

is Feb 24th. The trendline has been tested on two

occasions previously, but the renewed slide in equity

prices should push crude oil lower, in our opinion.

Fundamental pressure will come from another round

of weakness on the U.S. economic front, continued

builds in U.S. oil inventories, and the still
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relatively wide contango in Nymex futures. Best

to trade crude oil from the short side at least

down to $32.50. The crack spread and long gasoline/short

heating oil should also be favorable, as gasoline

inventories have declined to tight levels amid

several refinery shutdowns.