by Wolf Richter
Commodities Rout Not Quite Over Just Yet
We have not been true believers in the recent oil rally. And we still aren’t. Oil made a huge move, at one point nearly doubling in three months, but it’s still not at levels where US shale oil producers or Canadian tar sands producers can thrive, or even survive for long. We think the pain isn’t over.
We have seen this play out in US natural gas. Every major rally brought new production on line followed by an even greater natural gas glut – along with a subsequent crash in prices.