Oil trends

Bottom Line

Looking back is becoming less relevant. The variables that squared up market balances in the past are not fitting nicely into the variables that will solve the equation going forward.

We don't want to make more oil, we want oil to be cheaper. In fact, not only do the flagship producers that subdued oil prices over the last decade NOT want to increase production, they can't. They simply can't deploy capital the way they have in the past and still retain investors.

Until the laws of supply and demand reassert themselves, we have to witness the disconnect between short term known supply and short to intermediate and seasonal demand not matching up. While policy makers celebrate the 'pullback' in oil prices, the rest of us wonder how sustainable it is.