What's up with the recent price of oil?
There's a lot of talk in the media today about fracking, US energy independence, an energy glut and the like.
Sure, there's the trouble in Egypt. Some think it's tacked on a $5 or $10 a barrel risk premium. After pulling back on Thursday to $104.91, it recovered Friday to close at $106.25. Just a few weeks ago oil traded well below $100.
Some analysts believe $100 a barrel oil is the new norm. At that price oil is still quite a bit above it's 52-week low last November of $84.44. We' ll spare you the spread talk about Brent versus West Texas Intermediate.
Brent crude, so the thinking goes, symbolizes world events while WTI more domestic happenings. At this point the market doesn't view Egypt's internal turmoil a major threat. Could the real message be that despite all the ballyhoo about new domestic supplies and the technological wonders of fracking the market smells something the cheerleaders don't want the rest of us to know?
With the EU economic mess not expected to be repaired anytime soon, a predicted drop off in emerging market growth and the well-publicized China slowdown, one would think it might impact demand.
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