For John, BLUF: For the time being the price of oil favors the American consumer and the American Foreign Policy makers. Nothing to see here; just move along.
Bloomberg News yesterday had an article, "Oil Falls to Lowest in Almost Six Years on Global Glut". The article talks, on the one hand, about OPEC Secretary-General Abdalla El-Badri talking about how low prices could drive out investors and then oil might rebound to $200 a barrel, up from the current price for West Texas Intermediate for March delivery of $45.15.
As an aside, our snow storm, Juno, was mentioned, "A blizzard that may dump 2 feet of snow from New York to Boston bolstered diesel, often traded as a proxy for heating oil."
A surprising thing is:
U.S. inventories climbed to the highest level for December since 1930, the American Petroleum Institute reported Jan. 23. Supplies increased 7.4 percent from a year earlier to 383.5 million barrels in December, the Washington-based API said in a monthly report. Production accelerated 16 percent to 9.12 million barrels a day, the highest level for any month since February 1986, according to the industry group.1930. December of 1930 would be The Great Depression, which kicked off with Black Tuesday (October 29, 1929) and was worldwide by 1930.
I am not saying this is a sign of the Apocalypse, but it is an indication that fracking has upset the world oil markets to some degree and changed power relationships across the globe.
Regards — Cliff
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