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Jefferies Has Turned Very Bullish on Oil: 6 Top Reasons Why

The huge collapse in the oil complex and pricing over the past year was for many Wall Street old-timers a scene that has been played out before. Massive deck pricing drops in the spot price and the forward futures markets, huge drops in production to accommodate the price collapse, the inevitable dog-piling and shorting of futures and equities by hedge funds, and of course, the recession. Oh … wait, there is no current recession.

Typically in the past, when there were huge price drops in the oil complex and the commensurate drop in gasoline prices, it didn’t matter. The country was often in or starting a recession, so the break to consumers didn’t really make that much of a difference. In an area that is considered no-man’s land on Wall Street, “this time it may be different.” Six words that nobody ever likes to hear uttered may just make sense now.

Some of the firms we cover say the recent rally is just a head fake, and some anticipate retesting lows as oil has printed a bottom multiple times since the massive sell-off started. A new report from Jefferies goes down a very different road, and comes out with a bullish assessment, as well as six top reasons to support the analyst’s thesis. They may or may not be proven correct, but one has to admire the stance the firm is taking.

1. First is...