Here’s an interesting one. Secretary Chu thinks oil prices are rising out of economic optimism. I can’t be so certain that that is the case.
New Rule:
- 45 Dollar oil is new 20 Dollar oil of 1990′s.
Once we accept that 45 is the new 20, and I would even venture to say that 50 may be a better reality. That is to say that it is new base needed for profitability, and reasonable exploration economics. We can extrapolate from this that 10 dollars is speculative and investments. anything beyond that, until the economy proves otherwise, is pure geopolitical/spurrious prive movers.
I expect a short fall after memorial weekend, then a sustainment of 60′s during the summer. From there we can only look towards geopolitical situations and economic recovery. The secretary, I think, is being a little premature at this point.