On a weekly basis, oil inventories dropped as was the same for gasoline. But, looking at the TOTAL gasoline inventories shows us the end demand is not there. Oil companies are busy drilling and refining, but there is an obvious problem with sales to the consumer.

Consumption is confirming that there is a good deal of slack still in the system and that oil prices could see further downside pressure.

Even so, we covered our short position of oil (through ETF – EUO) as the idea that Mr. Bernanke will continue in his post will surely mean that the risk trade could be ON again. That would translate to a slide of the dollar and a rise in oil prices.

For now, better to sit and watch from the sidelines.

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Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the date published.