Oil prices have been driven higher by momentum in recent days and weeks as investors speculated about tighter market conditions amid the recent de-stocking of crude inventories, owing in part to reduced crude production from the OPEC and Russia.
The crude oil glut that many said would never go away is officially gone. For the first time since June of 2015, oil supplies are back in the average range and not above average. This is happening as U.S demand is above average and that in part explains why the supply of oil continues to drain at the fastest pace in history.
The precious metals sector moved higher in the first days of this year, but based on yesterday’s decline and the current price levels, 2018 is already a down year for silver and mining stocks. Is the rally indeed over?
Crude oil prices traded at the highest level since OPEC declared a production war on Shale and laughed off an estimate of record U.S. oil production from the Energy Information Administration. The reason why the oil bears got it wrong was that they underestimated demand and overestimated production.