The Coming Oil Shock?

  • The cutback in exploration and even production, and the increase in demand as a result of the oil price crash will work slowly to rebalance the market, at a considerable.
  • Some even argue that the cutbacks will pave the way for much higher prices down the road.
  • The reality is, short-term almost all adjustment works through the price, quantities only adjust slowly, producing wild and sudden swings in the oil price in reaction to shocks.
  • But the underlying trend for the oil price is up, and it’s more important battles lie elsewhere, no matter how spectacular these swings are.

The Coming Oil Shock? | Seeking Alpha