Over the weekend, OPEC members sent a signal that they were unsure of what the would do with supply and inventories. Most members favor cuts as US stockpile rise, but it is not certain to what extent an output reduction would impact global oil and gas prices.
In the meantime, signals from the stock market would appear to support the theory that prices will go higher over the near and medium turn. After dropping in Septmeber, shares in Exxon, Conoco, and Schlumberger are up between 5% and 12% over the last 90 days. An excellent return, particularly for stock that have strong yields.
Wall St. could be right. Oil could move up from its current level of about $62 back toward $70 and fatten oil company profits once again. But, if that does not happen, a 15% to 20% correction would not be a surprise.
Douglas A. McIntyre can be reached at email@example.com. He does not own securities in companies that he writes about.