After yesterday’s bullish
close, I was hoping that we might see something that’s been extremely rare
lately: two consecutive up days.

The S&P 500 actually
added 3 points on June 3, the day after an impressive rally. But it sure seems
like it’s been longer. Before that one, you have to go all the way back to
April 28-29 to find back to back gains for the S&P 500.

I’m not giving up on a green
close today, but it’s going to be tough after the disappointing retail sales
number…

Yesterday,
I discussed the big fear that’s behind the current market weakness. The euro
and
China are symptoms. The fear is that corporate profits
will not be able to keep pace. And today’s 1.1% drop for retail sales
(ex-autos) does not bode well for profitability.

Of course, retail sales had
been chugging along at a better than expected pace for much of the year. And
the weakness in May sales wasn’t across the board. Only 5 of the 13 major
categories of retail sales showed declines, led by a big 9.3% drop in building
material sales.

We’ve also seen slight
weakness in wholesale inventories and factory orders.

Today’s retail sales miss
doesn’t guarantee a down day. Like I’ve said about unemployment, we are in an
economic recovery and there will be bumps along the way.

Investors are still focused
on the euro.

I really
am at a loss to explain why the recent supply/demand forecasts from the
International Energy Agency (IEA) aren’t getting more attention from the media
and investors.

In case you missed it, the IEA
has dramatically cut its oil supply numbers and raised demand estimates.

As recently as In 2008, the IEA
estimated that global supply would hit between 100 and 105 million barrels a
day in 2020, and 110-115 million barrels a day in 2030.

But now, the EIA says oil
supplies may only be between 90 and 95 million barrels a day in 2020, and
100-105 million barrels a day in 2030. These estimates are between 10 and 15
million barrels a day lower than previous estimates.

Energy economist and editor
of
Energy World Profits Gregor Macdonald says “The forecasting of the IEA has
been abysmal this decade. The actual growth of global crude oil supply compared
to their forecasts has been so far off the mark that the agency probably
shouldn’t have even bothered to produce forecasts."

Yesterday, the IEA raised
its demand forecast for 2011 by 2% to 86.4 million barrels a day.

So we have oil demand rising
and supply falling. If demand continues to rise by 2%, we’ll see 90+ million
barrels a day in demand in 2013. Supply of 90-95 million barrels a day in 2020?
That’s a problem. In fact, it’ the single biggest problem we face right now.
And still, the
U.S. has no coherent energy policy.

I have my own energy policy,
though. I call it “Buy Oil Stocks Now.”

I know I sound like a broken
record, but there’s just no way oil prices won’t be significantly higher over
the next couple of years as investors realize just how tight the supply and
demand picture is.

You can get my top oil
picks, as well as learn more about Energy World Profits HERE.

Published by Wyatt Investment Research at