How much has the US oil industry been inflated, crushed and generally distorted by the Federal Reserve’s monetary force-feeding over the past nine years? According to my probing along the stages of production and trading, the answer is “a lot”. Yes, there have been dramatic developments in hydrocarbon production technology, but those looked even better through the distorted lens of quantitative easing. Oil and gas pricing have now stabilised, in the sense of finding a finance-friendly range somewhere north of $50 per barrel. There have been lay-offs and bankruptcies, but fewer than in the oil bust of the 1980s. Manhattan and Oklahoma City were treated relatively well by quantitative easing. In many ways it is easier for cheap money to find its way into the energy business than into the rest of the US economy, thanks to the breadth, depth and long-dated terms offered by the futures markets. As […]