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Page added on December 29, 2009

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Is thin trading driving oil prices?

“We continue to be of the opinion that the real driver of the oil market last week and this week is the lack of trading volume in the futures market and not really the lack of oil supplies.”

These were the recent words of Olivier Jakob of Petromatrix in Switzerland, and are yet another example of the bearish sentiment toward oil prices that is rampant in the analyst community. Nobody wants to admit that the current supply and demand relationship is temporary. Nobody wants to acknowledge that the world faces some tough decisions in the months and years to come regarding energy supplies.

The era of cheap oil is over. Sure, we could maybe see oil in the $60’s again. But it’s pure folly to expect that oil prices might remain there for any length of time.

Small Cap Investor

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