Once the market digests this as a non event then reality will...

Once the market digests this as a non event then reality will set in. i.e.

1. Almost zero capex in Oil Exploration in the last 2 years. According to Chevron the world needs $17 Trillion invested in oil in the next 14 years. We have already has 2 years with zilch investment. A recipe for disaster.
2. Conventional oilfields depleting at 4.5% per annum.
3. Almost zero investment on conventional 0il infield recovery.
4. World oil demand increasing by 1.3% or say 1 mbpd
5. Shale ponzi imploding at about 1 mbpd.
6. Middle East tensions. e.g Trouble in South Iraq and yesterday's Kuwait strike . Things are not well over there.
7. Renewables are miles behind. And have a look at SunEdison going down the toilet. A solar "Enron".
8. Electric cars are on the increase which is fantastic. At the moment the average subsidy per car is about $20,000. And they do need energy.

The world runs on oil and if you don't reinvest it will come back and bite you.
Oil goes higher but remember it is lower for longer. This shale ponzi will take a while to play out. Can you imagine Chesapeake mortgaging their whole company last week for $4.5 billion.? And with most of their assets in gas this is a recipe for disaster I am afraid. USA gas production is unsustainable at $US 2. Break even at $4. Production is falling. ( most of the rigs stopped and went over to oil. )
It is such a ponzi.

I thought today was overdone. Reality will return. But the banks in America had better realise that it is lower for a lot longer.