Traders in the energy markets have had more than their share of ups and downs in the last year, and it appears they may be in for another ride higher. After slumping to almost $45 a barrel in conjunction with the stock market skid last Monday, crude oil futures have bounced back above $50. Lower prices have discouraged production, but economic issues also continue to discourage demand so it’s hardly time for bulls to get too excited — until crude oil gets close to the March high and above $55 a barrel.
A dampening effect on the whole energy sector is the price of natural gas, which dropped to $3.28 per mmBTU Friday, the lowest since 2002. Eventually, of course, all the bearish price action will have its effect on supply and demand. Some day, bulls will have their day again.