Gary Bourgeault's February 15 analysis for Seeking Alpha of oil pricing is the best one I've seen in many a day; it cuts through all the hype and outright dishonesty published in the financial press on the topic.
Bourgeault doesn't address what will happen to the financial markets when the bubble gets so heavy that hot air can no longer support it; he just lays bare the current myths about the price of oil. Here I'll provide only the article's opening passages but the entire analysis should be studied and saved for future reference.
- Keep ignoring the Fantasy Island of there being an oil rally - there isn't one.
- The idea of a supply agreement, not a supply agreement itself, is what's temporarily driving market.
- Saudis have stated demand will rebalance the market -- so why would they support a supply cut if that's true?
- If there isn't an immediate announcement to set a date for a meeting, it'll confirm it's another ploy to temporarily slow the plunge in oil prices.
You know the oil industry and those trying to prop it up are getting desperate when the only tool they have left in their arsenal is to continually report there is going to be a meeting between top oil producers to enter into an agreement to lower supply to the market, which according to OPEC is about 2 million barrels per day above market demand.
- Media continue to underestimate the shale revolution.