Over the past few weeks, as the full dimensions of the economic meltdown have come into focus, most analysts have concluded that the financial crisis is the child of numerous parents, including predatory lenders, deregulating legislators, and excessively optimistic borrowers. Even so, the vast majority of the responsibility has managed to attach itself to the financial industry.

While taking the blame for tanking the economy, establishing Republican socialism, and possibly destroying Western Civilization, Wall Street has had its own problems. As the major players in the financial industry have crashed and burned or been eaten up by other, lesser players, the streets have been filled with the saddest form of performance art. Once arrogant masters who strode the universe on the southern end of Manhattan have become masters of the cardboard box, carrying their personals home to overpriced condos that were purchased at the height of a real-estate boom. The dive in the housing market, which has already hurt so much of the country, has only threatened New York; right now, fingers are crossed from TriBeCa to Harlem.

In the midst of this, Doubledown Media held its annual Wall Street Boxing Charity Championship in New York's Hammerstein ballroom. Admission prices ranged from $125 for general seating to $10,000 for a ringside table, and the event raised money for two charities: a youth village in Rwanda and Tuesday's Children, an organization that serves the families of 9/11 victims. The fight card featured professionals from some of Wall Street's biggest names; for anybody who is particularly interested, the winners included a guy from Deutsche Bank, a guy from Citi, and a guy from the NYMEX. The guy from Morgan Stanley lost in a decision.

In the oil market, as in the U.S stock market, there are fundamental analysts and technical analysts.

Fans of fundamentals follow things like inventory levels, global oil demand, and refinery capacity. Fans of technicals follow things like the 50-day and 200-day moving average and chart formations (double tops, double bottoms, etc.).

Moreover, rarely do these two analytical schools merge in one trader: you're usually either a fan of fundamentals or technicals.

A 'hybrid' trader

Energy trader Jim Dietz breaks the mold. He's a hybrid trader, of sorts. He primarily follows fundamentals, but gives technical analysis its proper respect, and currently on the chart are two, technical oil price levels that are worth paying attention to, as they are likely to provide clues regarding oil's direction, he said. Dietz added that he is presently flat, or had no open energy trading positions.

Oil, Dietz said, "has closed below support in the $115-116 range for two days in a row." Tuesday would be the third, if it closes below $115, and if it does, that would be bearish for oil, he said. Oil was down 29 cents to $112.58 in mid-day Tuesday trading.

Hedge funds and speculators reduced positions in oil by 80% as prices rose to records and as U.S. regulators started investigating trading, Bloomberg News reported Monday, citing government data.

Net long positions decline to 25,867 contracts on the New York Mercantile Exchange in the week ended May 27, 2008 from a record 127,491 contracts on July 31, 2008 according to a U.S. Commodity Futures Trading Commission report.

Last week, the CFTC, under pressure from Congress, announced that it had expanded an investigation of oil's price rise and oil futures contracts. Oil has increased about 100% in the past 12 months, and about 480% since 2002. Oil rose $1.50 to $128.50 per barrel in mid-day Monday trading.

Politicians this week have come up with a brilliant plan. Oh, let's blame the recent oil price hike on speculators, why don't we? This way, we can continue not doing anything about energy prices and oil's scarcity and still keep our jobs. Let's just deflect attention from us and our inaction and blame it all on those commodity traders.

Okay, of course, anyone who manipulates oil prices, inflating them artificially and causing us to pay $4 a gallon at the pump as a result while making a nice juicy profit on our backs, should pay. No doubt. But here's a thought: what if these speculators are doing us a service?

I'll use a line from Syriana: "It's running out." We all know it. At some point there will be no more oil, or it will become so scarce that $4 a gallon will sound like a joke, like my grandma telling me about those five-cent movie tickets (I still think she was pulling my leg!). And barring any alternative energy found to heat our homes, fuel our cars and power our factories, it is not difficult to envision doomsday scenarios.

So perhaps, instead of reaching that crucial stage and having to start scrambling for solutions then, perhaps the recent oil price hikes have done us more good than harm. It put the problem of oil and energy in the forefront; it made the problem too big to be ignored, brushed aside. Indeed, there has never been this much news and these many resources diverted to alternative energy as there has been in the past year (at least it feels that way).

The high price of oil has repercussions throughout the economy; it trickles down to the smallest of items and we've only been experiencing the beginning. The effect on prices is lagging. Still, only Wednesday Dow Chemical (NYSE: DOW) announced a price increase of up to 20% to offset these higher costs. Dow's CEO blamed Washington for not listening to industrialists when they demanded action for years.

CME Group(NYSE:CME) is recently trading down $45 to $440.26. CME' s clearing member, MF Global-(NYSE- MF) , is recently down $11.10 to $6.23. The CME announced an offer of 0.323 share and $36.00 per share to acquire NYMEX(NYSE:NMX) this morning. CME March 440 straddle is priced at $41.05. CME April option implied volatility of 57 is above its 26-week average of 35 according to Track Data, suggesting larger risk.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Oil closed Wednesday up 73 cents to $100.74 per barrel -- a new record high close -- in a session anxious to hear Thursday's report on weekly U.S. inventories. Oil had traded at a print record $101.27 earlier in this session.

The weekly Wednesday oil inventory report will be released this week on Thursday, one day late, due to the Presidents' Day holiday. Oil closed above $100 for the first time in its history Tuesday, at $100.01.

"It's been a wait-and-see market today, for the most part," independent energy trader Jim Dietz told BloggingStocks Wednesday afternoon. "Neither bulls nor bears seem to want to make a major stand ahead of the inventory report, but we did trade above $100 again. If we close above it today, that would be a bullish sign." Dietz added that he is currently flat -- or has no open energy positions.

Crude oil traded at a record printed trade of $100.10 per barrel Tuesday before closing at $100.01 on talk that OPEC will cut production when it meets March 5.

Other major fuels also rose: heating oil soared 10 cents to $2.75 per gallon, unleaded gasoline vaulted 11 cents to $2.60 per gallon and natural gas gained 30 cents to $8.96 per million BTUs.

In inflation-adjusted terms, oil hit an all-time high of $102.80 per barrel in April 1980.

'So much for the bears'

Oil has rallied more than 15% since the yearly low of $86.99 on January 23, and it's giving oil bears like independent energy trader Jim Dietz fits.

CME Group is preliminary talks to buy energy/precious metals market Nymex, CME announced Monday, in a statement.

Under terms being discussed, CME Group Inc. (NYSE: CME), the world's largest derivatives exchange, would pay Nymex Holdings, Inc. (NYSE: NMX) $36 per share in cash and 0.123 of a CME common share, which would value the deal at about $11 billion, Reuters reported Monday.

Nymex shares rose $9.01 to $116.17 on the news, while CME's shares fell $12.77 to $616.01 in Monday afternoon trading.

CME Group was created in July 2007 via the merger of the Chicago Mercantile Exchange and the Chicago Board of Trade in a $9.3-billion deal. Nymex, which is short for the New York Mercantile Exchange, went public in November 2006.

Oil fell $2.01 to $88.56 per barrel Monday in electronic trading on the New York Mercantile Exchange - - pushed lower by a major sell-off in stock markets in Europe and Asia, amid increased concern that a weak U.S. economy will prompt a global economic slowdown.

Oil is down more than 11% since briefly trading above $100 at $100.09 on January 3, 2008. Oil hit an all-time high, in inflation-adjusted terms, of $102.80 per barrel in April 1980.

Oil fell after global equities markets sold-off amid both increased concerns that the world's other major economic regions will be hurt by the U.S. economic slowdown and talk of additional write-downs/asset losses stemming from the U.S. subprime mortgage sector.

The Finanical Times reported that shares in China plunged 5.1%, Hong Kong shares sank 4.5%. In Europe, London's FTSE dropped 5.5% to 5,578.20, the German Dax plunged 7.2 to 6,790.19, and France's CAC-40 sank 6.8% to 4,744.45.

Oil fell $1.69 to $93.98 per barrel Thursday morning as traders re-calibrated their positions on sentiment that both oil and gasoline consumption growth will moderate during the expected U.S. economic slowdown.

Heating oil dropped four cents to $2.57, unleaded gasoline fell five cents to $2.38, and natural gas declined five cents to $8.15 per million BTUs.

Independent energy trader Jim Dietz told BloggingStocks Thursday that Goldman Sachs' warning that the U.S. economy is "probably slipping into a recession" sent the worst fear possible into many oil bulls -- the fear of a changing dynamic in the oil markets.

The Goldman effect

"The Goldman report hit the market hard. Traders now sense that oil product demand, particularly gasoline demand, will moderate in the months ahead, which takes pressure off prices," Dietz said. "There's also a sense in the market now that the giddy oil market is over, that you can't count on making an easy pop [quick, 50-cent gain] each morning no matter where your long entry point is. Traders are getting much more careful about their entry points."

The fastest-growing position -- or calculation -- in the oil market is that oil prices will double, reaching $200 by the end of 2008, Bloomberg News reported Monday.

Options to buy oil for $200 on the NYMEX rose ten-fold in the past 60 days to 5,553 contracts, a record increase for any period.

The contracts are a typical, affordable way for traders and others to speculate on oil's price. Oil gained 11 cents Monday morning to $98.01. Heating oil fell 1 cent to $2.67, unleaded gasoline declined 1 cent to $2.51, and natural gas fell 9 cents to $7.75 per million BTUs.

Oil -- it's a buyers' market

Independent energy trader Jim Dietz told BloggingStocks Monday he isn't surprised at the increased number of $200 oil options, given long-term factors affecting the vital commodity. Dietz does not own any $200 oil options, but added he knows colleagues who do.

Oil again traded over $100 Thursday, crossing the psychological barrier for the second consecutive day, boosted higher by cold weather in the Eastern U.S. and a below-consensus oil inventory report.

Moreover, a prolonged cold snap in the northeast combined with one more bad news item from any of the world's troubled oil producing regions, "will easily keep oil above $100 per barrel," an energy trader told BloggingStocks Thursday.

"If the cold weather breaks in the northeast, we may trade below $100 for a while, but if it doesn't, we should take out and stay above $100 soon," Jim Dietz, independent energy trader, told BloggingStocks Thursday. "There is significant psychological resistance at $100 and slightly above it at the all-time high, and we could see some proft-taking on the run-up past $95, but this market remains bullish." Dietz added that he is long with oil, heating oil and natural gas for both daily and monthly trades. Cold weather in the northeast is expected to last through at least Friday, with low temperatures near 15 degrees expected in New York for Thursday night.

Oil surged above $98 per barrel Wednesday on expectations that U.S. oil stockpiles declined for a seventh consecutive week, Bloomberg News reported Wednesday.

Oil rose $2.31 to $98.29 before pulling back slightly to $97.75, as traders attempted to gauge both U.S. demand and geopolitical factors affecting supply as the new year dawns.

Demand, Nigeria weigh

Independent energy trader Jim Dietz told BloggingStocks Wednesday that unrest in Nigeria is also putting energy traders' moods in a bullish frame of mind.

"We've got the political situation in Nigeria popping up again where 12 people were killed by militants and a near-unanimous consensus that U.S. stock piles will be lower, so that's more than enough to send this oil market higher," Dietz said. "I know it's not what consumers want to hear at the start of a new year, but oil and heating oil prices are heading higher, at least for the short-term."

Heating oil gained about 4 cents to $2.69, while unleaded gasoline rose 5 cents to $2.53 in Wednesday morning trading. Natural gas gained 17 cents to $7.65 per million BTUs.

Crude oil rose slightly Thursday at midday, as traders digested the market impact of OPEC's decision in Abu Dhabi to maintain current oil production levels.

Crude oil gained 55 cents to $88.54. Heating oil rose 2 cents to $2.51 and unleaded gasoline rose 3 cents to $2.25.

Despite elevated oil prices, the Organization of Petroleum Exporting Countries Wednesday opted to maintain current production levels, brushing aside calls to pump more crude oil in order to help lower -- what many believe -- oil price that may further slow the U.S. and global economies.

Crude oil was virtually unchanged at $98.02 Wednesday at midday, as traders took a wait-and-see approach following a 1.07-million-barrel drop in weekly crude inventories for the week ending November 16 .

Analysts had expected an 800,000-barrel inventory gain, hence Wednesday's draw down struck some traders as an anomaly, perhaps attributable to thinner trading conditions ahead of the [U.S.] Thanksgiving Day holiday.

Earlier, crude oil had reached a record $99.29 per barrel in electronic trading.

Heating oil gained about 2 cents to $2.70 and unleaded gasoline rose about 1 cent to $2.45. Natural gas dropped 0.007 to $7.470 per million BTUs.

Oil Analysis: Fundamental and technical indicators continue to favor an oil price move toward and beyond $100 per barrel, although Wednesday's thin trading conditions will make it harder to clear the $100 hurdle today, than in a normal trading volume session. Further, traders underscored that no factors have appeared that suggest the oil-higher trend is set to end.