NEW YORK (
) -- I was talking to Joe Deaux today about the tremendous move of West Texas Intermediate (WTI) crude oil relative to Brent crude oil and the accompanying move of U.S. domestic exploration and production companies such as
(EOG - Get Report)
(APC - Get Report)
(NBL - Get Report)
Although I predicted the collapse of the WTI/Brent spread and the subsequent rise of domestic oil prices, I've also received lots of questions on what to do with the rallying exploration and production players now.
Readers are wondering whether the spread will continue to close and whether West Texas Intermediate might again price at a premium to European Brent crude, as was the case for virtually a decade and a half before 2011. I think it will.
The rally in crude oil proves a few things that I have been talking about for years and described in my book
Oil's Endless Bid
; financial factors are far more important than fundamentals in determining the price of oil that we pay.
For oil today, there hasn't been any disruption in the trajectory of the commodity "supercycle." crude prices have set higher lows in every year since the financial disaster of 2008. As more money continues to find its way into the crude trade, prices continue to inch higher, even though we are domestically producing more crude than we have in 25 years and continually importing and using less.
And now that the financial influences are in full grip on the oil trade, there is no reason that crude won't resume its financially driven path -- and will see WTI crude go over Brent crude by at least $3 a barrel, restoring the historically "correct" relationship.
That continues to bode well for the domestic exploration and production players despite the huge run they've already enjoyed.
I talk more about oil prices, the WTI/Brent spread and domestic oil producers with Joe in the video above.
At the time of publication, Dicker owned shares of EOG and NBL
This article was written by an independent contributor, separate from TheStreet's regular news coverage.