The oil bulls, apparently gluttons for punishment, have reared their heads, convinced they can mount an aggressive charge.

Silly bulls, say the oil bears, who cast aside the bulls' belief that OPEC's March 15 meeting and likely additional production cut will put a floor under oil's price. Oil traded late Monday afternoon up $1.77 to $47.29 per barrel.

Oil market at the crossroads?

The bears point to a U.S. recession that shows almost no signs of bottoming, and about five hundred thousand fewer drivers on U.S. roads each month (in the form of laid-off employees). And just for good measure, the bears throw in the World Bank's latest global GDP estimate, which calls for the world's economy in 2009 to contract for the first time since 1945. International trade is expected to decline as well, the bank said.

A U.S. recession, fewer drivers on U.S. highways, a global recession, and fewer container ships moving goods around does not add up to rising oil prices. So what do the oil bulls have to hang their hats on? 1) The belief that oil is already underpriced due to irrational fear gripping financial markets -- oversold in traderspeak -- and 2) the confidence that OPEC will cut 1-1.5 million barrels per day (bpd), soaking up excess oil sloshing around in the U.S. and global markets.

Tim Evans, energy analyst with Citi Futures Perspective in New York, told Bloomberg News Monday that time is on the old bulls' side, yes it is. "OPEC has made substantial cuts since production peaked in July," Evans said. "The longer this trend continues, the more prices will be supported. We are starting to see evidence of lower availability of oil."

Economic Analysis: General Electric Company (GE) CEO Immelt is preparing for the operational battle of the century, investor Warren Buffett says the economy has 'fallen off a cliff,' and oil is will go racing ahead? Hmmm. As they in real estate, you may want to visually inspect that parcel of land in Florida before purchasing it. OPEC is the only factor the oil bulls have to bolster their argument. OPEC remains influential, but recent production cutbacks mean the cartel controls about 33-35% of the global oil supply. Other producers with modest production capacity could come in to the market to make-up some of the cutback. And U.S. gasoline demand and international oil demand may decline further in Q2 and Q3. It's awful hard to side with the oil bulls in that environment. Hence, for investors, forewarned is forearmed, if you're considering starting or adding to an oil play at this juncture.

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