Commodities

The last few weeks are looking increasingly like the crowded longs were finally washed out of their position in crude oil after its failed foray down towards $US80 on China induced recession fears, the subsequent rapid recovery looks to us like the complex’s 30% correction is complete.

• We believe the risk / reward has swung in favour of the bulls assuming the $US80 area can hold.
• Interestingly, the majority of the major oil stocks actually bottomed in July and have looked increasingly bullish ever since i.e. They will also in all likelihood top out first.