Phil Taylor on oil:

“So here is where the bullish oil premise runs into trouble – WE DON’T HAVE ANY MONEY! We had to borrow money last year to pay over $100 a barrel for much of 2008 and, since then, the global economy has collapsed, our 401Ks were chopped in half, 10% of us lost our jobs and can’t afford ANY oil at all, and those of us who are left have become a lot more concerned about going to a gas station and paying $60 to fill up a tank. You can bitch all you want that $60 with the dollar at 78 isn’t the same as $60 with the dollar at 84 but WE DON’T CARE. There has not been enough (any) wage inflation to put more dollars into the hands of the consumers. You cannot sustain inflation unless you inflate the money allocated to the consumers as well. Not only that, but the banks have stopped lending and our homes lost 25% of their value so we can no longer take out lines of credit to gas up the Hummer. In short – it’s not 2008 anymore and you can fantasize all you want about $100 oil but your customers just can’t afford it.

And consumer confidence may be back to 52, but it was 120 last summer when people were taking third mortgages out (no docs of course) before heading to the gas station to pay as much as $5 a gallon. I may be early on this call but I do think that – the longer I’m wrong – the righter I’ll be in the end….

We’re still mainly in cash with oil as our big downside gamble…”