Oil prices are always being tugged between short-term demand and long-term supply expectations. Over the long-run it seems that most, if not all, of the “easy” oil finds have been made leaving behind heavy oil that requires more capital and technological progress to make it feasible to extract. In the short-term demand trends can overwhelm these long-term supply concerns. After a strong run oil prices have pulled back, but now defenders are looking again for higher oil prices. This call is dependent upon the global economy at least holding its own in here. In today’s screencast a look at the oil economy.
Items mentioned in the above screencast:
The era of cheap oil is over. (WSJ)
Goldman Sachs (GS) is once again bullish on oil. (Zero Hedge)
Goldman needs to get its story straight. (TRB)
A look at how energy stocks have traded relative to the rest of the market. (All Star Charts)
Daily price chart of the Energy Select Sector SPDR (XLE). (Finviz)