Bill: So what are these fires going to do to the price of oil as a factor? James Cordier, from OptionSellers.com, he thinks the wildfires there are giving oil a short-term string, and the headlines will be no match for the over-supply. In fact, you think we could see $35 again by the end of the year, don’t you?

James: Bill, we certainly do. We’ve certainly had a seasonal rally. Last time we spoke to you we were back in January and we were talking about a seasonal rally starting in February, rallying into March and April. We’ve had that. The fundamentals have not changed that much from last winter when we were sitting around $30. There’s a lot being made about the smaller production in the United States. Of course, we’re losing some barrels out of Canada right now. But as we get past driving season, we’re going to have, once again, a glut of oil. We’re losing places to fill storage tanks around the world. Believe it or not, we’re starting to import oil here again, and I think this fall we’re going to have a big supply problem on our hands, once again.

Kelly: Before we get to that, James, to your point about what’s happening in Canada, BP Canada has just declared a force majeure event following the Alberta Wildfires. That means a reduction in available Western Canadian select crude among other grades, and that’s according to Reuters, which sites two trading sources familiar with the matter. So, BP is saying delivery of oil would be affected during the month of May. So, focusing on the direct impact of this, James, what do you anticipate it would be?

James: You know, today crude oil is trading $2 under its previous high over the last week or so. We hit $47-$47.50 recently. We’re down $2 below that in the summer months. If, in fact, we thought this was going to be a long-term fundamental change, we would be trading up near those highs that we were last week. So, the fact that we’re down $2 from that level tells us that the seasonal rally, and the play that a lot of investors took part in back in winter, is just about running its course. In a hockey game here in Tampa, we’re probably in the 3rd period right now of this market rally.

Bill: You know, for me, I wonder why we’re not at $35 a barrel now. I get the whole concept of the seasonal rally and all that, but we’re in unusual times, if not unique times, right now with the glut of oil that we’ve seen with the tremendous overproduction that has gone on around the world. We still have tankers, I’m told, out in the ocean waiting to find some place to drop off their oil. You were even making the point that fundamentals maybe aren’t supporting this seasonal rally and we’ll have this glut down the road. There’s a dichotomy there. What’s going on here?

James: The market rally is practically every February through May, whether we have the largest supplies in history, like we do right now, or not. If, in fact, the fundamentals bode well for the market, it then rallies into June or July, it extends the seasonal rally. Bill, you nailed it. The supplies worldwide are enormous. The United States has supplies near 100-year highs. Iranian and Iraqi barrels are going to start coming on to the market September, October, November, and we’re going to have a glut of oil again. No one knows how low we’re going to be. We’d expect we’ll be in the low 30’s in the 4th quarter of this year. Seasonal rallies are really interesting how in fact they do take place. They did it again this year. We would be shorting oil over the next 30 days with both hands.

Kelly: Alright, James, thanks for joining us.

James: My Pleasure.