We continue to watch for “at the margin problems” in the world economy that would highlight an upcoming synchronized slowdown and problematic period. These are some of the recent events that are weakening the underpinnings of the current positive consensus view and may indicate that many parts of the world will face a pronounced slowdown and possible recession in 2013.

Watch for a breach of US$84.05/b (now $85.84) to signal that OPEC has not made the appropriate cut in production and that weaker economic conditions worldwide are depressing oil prices.

For the S&P/TSX Energy Index, our forecast remains that we should hit another new low. Our target remains in the 200 area.