Although the EIA weekly report showed that crude oil inventories dropped for a ninth straight week and distillate stockpiles fell more than expected, U.S. production outweighed positive news. But did yesterday price action change anything in the technical picture of black gold?
Traders laughed off the International Energy Agency’s "no change in demand forecast" because it is clear to all non-biased readers that demand is going to grow in the next year. Their prediction of so-called "explosive” shale oil production growth is also being brought into question. For a major reporting agency using hyperbole like the word "explosive" seems like a desperate attempt to get attention and try to get attention to support the position of the consuming countries that they represent. We know that demand is strong and we are seeing it week after week.
The International Energy Agency came out with an “explosive” report talking about “explosive” production growth as the United States will become the undisputed leader in global oil production. Take that Saudi Arabia and Russia! The agency that is known by traders as the agency that has way underestimated, is now proclaiming the United States as the new global energy powerhouse, a moniker by the peak oil freaks and the Obama Administration that was thought to be impossible.
There are many plausible risks, which could materialize in 2018, supporting or even boosting the price of gold. The most important are as follows: the U.S. political risk, the correction in the U.S. stock market, and a significant uptick in inflation. Let’s analyze them now.