It seems that crude oil is busting out of its bust cycle as the crash in oil prices has put a market that was seriously oversupplied back into a semblance of balance. The reason that we are seeing such a quick turnaround is an old story about how low prices cure low prices.
Now you see it, now you don’t. Presto chango, and all of a sudden barrels of crude are disappearing at a time when demand is rising, causing a path to global oil supply tightening. Not only did the Energy Information Administration (EIA) shock the market with a 3.5 million-barrel-drawdown, the International Energy Agency (IEA) is lifting its global demand forecast.
Co-Managing Partner & Chief Investment Officer, SkyBridge Capital Ray Nolte moderated “Mapping the Course: An Investor’s Guide to Capital Preservation in an Age of Uncertainty” on Wednesday morning in the second session of the 2016 Salt Conference.
The world is getting an object lesson on the problems of having one dominant global currency and even the supposed prime beneficiary, the United States, can see the downside. Alarming bouts of volatility in world financial markets over the past 12 months have been rooted in a fear of what happens when a world with its highest-ever peacetime debt pile faces even a hint of higher interest rates.