Time To Short Oil?

Crude oil futures prices ended the session lower on Friday, posting the biggest single-day loss in 2 weeks.

NYMEX October Oil Futures dropped 3.7%, or 2.65 dollars a barrel, to 69.29 a barrel. That was the biggest decline since Aug. 31 and followed four days of gains that pushed prices up by nearly 4 a barrel on the "dollar weakness trade".

"It's the continuing battle between (weak oil supply/demand) fundamentals and economic optimism and there's a lot of uncertainty over which is going to be the strongest performer" in the conflict, said Gene McGillian, an analyst at Tradition Energy in Stamford, Conn.

Officials of the Organization of Petroleum Exporting Countries this week kept oil output restraints in place and said prices around current levels were fair for both producers and consumers. While OPEC leader Saudi Arabia expressed confidence over the coming economic recovery that will lift demand for oil, some analysts voiced concern about oversupply weighing on the market. I think there is an increasing possibilities that the OPEC members will cheat on their quotas oversupplying the market. But the major risk shorting oil is still the "dollar weakness trade" that has been going on.