Publications: Notes at the Margin

Is This All the Better the Market Can Do? (June 6, 2016)


The press has been celebrating the higher crude oil prices, which are up eighty-five percent from their lows. The general view is the oil price bottom has been set. Can't the market do more than this? We suppose $50 per barrel is better than $30 or $40. Prices have moved to $50, though, only because of a very large number of significant supply disruptions. These explain $15 per barrel of the increase. Absent the events, oil today would be at $35 per barrel. If the disruptions are addressed (a big if), prices will likely fall back to $35. This week we explore this topic along with US gasoline consumption and the regular look at the market's status.


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