Calls Grow For ‘Structural Bull Market’ In Surging Crude

Calls Grow For ‘Structural Bull Market’ In Surging Crude

I'm continually amused at how quickly the narrative changes. I used to jokingly refer to the "narrative du jour." Thanks to the combination of pandemic dynamics, the 24-hour news cycle and, relatedly, market participants' Linus-like need for an explanation (we need to know "why"), the financial front page infallibly features a new narrative each morning, like those chalkboard signs you used to see in front of restaurants touting daily specials. Vitol's Chris Bake underscored how quickly things
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7 thoughts on “Calls Grow For ‘Structural Bull Market’ In Surging Crude

  1. XLE getting love today, XLB not so much.

    I’d say investors are skeptical about the broad commodity supercycle call. For good reason IMO; a slowdown in Chinese property development should be a significant drag on broad commodity demand.

    I wonder if the supercycle call isn’t partly a reflexive reaction to rising rates and inflation, by those who see “hard assets” as an inflation hedge.

    1. @jyl – Good points. The recent price action of the big three iron ore producers reflects your caution on China.

      Historically “hard assets” have not shown much correlation with inflation. Gold has shown more, but it’s still not all that high. But the myth remains.

  2. (reposting from the earlier Oil and Bonds piece)

    what happened to the days when the US shale drillers were the “swing producers?” … did they all go bankrupt ?
    Weren’t they supposed to be profitable at $40-$50 oil? … just curious …

    1. Near death experience has US shale focused on paying down debt and courting shareholders via dividends and promises of discipline and profitability. Figured out that 10 bbl at $70 is better than 15 bbl at $40.

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