In a large saucepan, saute onions and parsley in oil and butter for 1 minute or until tender. Add rice; cook over medium heat until rice is coated with oil and translucent, about 3 minutes. Stir in the broth, cayenne and bay leaf. Bring to a boil.
Reduce heat; cover tightly and simmer for 18-20 minutes or until liquid is absorbed and rice is tender. Discard bay leaf.