There are a few more Bulls in oil than there are subscribers on Netflix. Of course, the thing that plagues oil right now is the same thing that ails Netflix; same old gets old fast. I have thought about the recent malaise in the oil markets and theorized it could be shifting traders or stagnant oil supply and demand. If we had to break down the other factors, one would think that the whole “geopolitical risk” trade would be worth something, but no. We’ve taken a pass on caring about the moves in the USD and as the economy holds and more jobs come online, we’re still not seeing much by the way of excitement for Summer driving season. The market is getting numb to the rising rig counts because everyone is starting to figure out that those rigs are starting to pump less per rig and it’s just getting worse. On the plus side, BP, which is the United Airlines of oil, has another well lose control and nobody even blinked. There were oil spraying and nat gas just flowing out of the well and before anyone could post a bad meme it was plugged and already forgotten.
The interesting thing about oil right now is that it’s not interesting. That’s not to say that funds aren’t still drawn in by the allure of commodity returns. We’ve seen some impressive long positions built upon the Commitment of Traders report, but even those numbers are getting less attention than the Kardashians at Coachella. So what is it that this market needs to bring it back to life? I can’t imagine a war in North Korea or another freeze out of Russia. Growth indications from China seem to be par for the course these days and although I like the idea of an economic recovery in Japan, nobody would ever bet on that one. No, I think that there’s a possible one coming and it’s one nobody will see coming. I’m not a petroleum engineer, but I’m starting to wonder just how much life that a lot of the U.S. unconventional shale wells have left.