Barry Parker Commentaries
Jun 1, 2015
Click here to access Oil and water
It’s been a while since I discussed the U.S. energy situation- the Jones Act, oil exports and all that. In the interim, the price of oil (which had been in free-fall) hit a bottom and has bounced upward; many commodity people view it as a bear trap or “dead cat” type of a bounce. After moving down to the low $40/barrel region (basis NYMEX oil), the price has bounced up to above $60/barrel (with the Brent oil- a marker for many international prices) typically at a $7 - $/8 barrel premium. Oil traders are closely watching the stats; certain pundits have suggested that renewed production (a response to the “rebound”) will quickly quash the recent gains. In the past month or so, the prices have leveled out; perhaps we’ve reached a new “equilibrium”- some $40/ barrel below the old level where the market seemed to balance.