Improving Oil Prices Not A Reason For Short-Term Optimism

The slight bounce in the steps of oil and gas professionals last week can be traced to a nice bump in oil prices, which have risen to three-month highs for both Brent and WTI.

Of course, several months ago very few industry people would have been excited at the idea of WTI sitting just above the $36 a barrel threshold as it is today.

The short-term excitement over rising oil prices should be tempered, however, for a number of reasons.

First, as we have discussed here in the past, oil prices are closely tied to the state of the U.S. dollar.  Morgan Stanley has noted that "a large portion" of the recent uptick in oil prices was related to the depreciation of the U.S. dollar during that same time period.