BARCLAYS: A lot of pros are getting these 5 things wrong about the oil industry
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Ray Gerish, a floor hand for Raven Drilling, works on an oil rig drilling into the Bakken shale formation on July 28, 2013 outside Watford City, North Dakota.
In a note to clients on Wednesday, Michael Cohen, the head of energy commodities research, wrote that the central story of the oil market right now is misunderstood. That's the market's rebalancing, or a reduction in supply to come closer to demand levels, which would lift prices.
"Global supply and demand estimates are extremely prone to error and are frequently revised in both directions," Cohen wrote.
"In addition to balance revisions, the fundamental components of the oil market balance are categorically misconstrued by many analysts and can drive short-term changes in oil market sentiment."
Cohen listed these five ways that analysts misunderstand the oil market:
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