In Texas these days, there’s a feeling of absolute and unwavering confidence in the concept of an American energy revolution. From the depths of reserves to the richness of the energy, an incredible transformation is taking place.
Overnight it seems that oil is now worried more about the prospects of the Fed tapering than all other global geopolitical and storm worries. Strong data out of Europe is offsetting concerns from Egypt.
Oil looks heavy while the stock market is in a Fed induced stupor. A rumor overnight of a blast in the Suez Canal was denied by the Egyptian military yet is a reminder that we have seen the market put in a sizable Egyptian premium.
In the past when OPEC’s back has been against the wall, like the late-1990s, energy prices and demand rebounded to save them from the ash heap of history. Yet this time may be different. Why? Because OPEC is not the only game in town!