Come join the bull oil party. The room was empty a few years ago but now everybody is jumping on the dance floor. Crude oil is a boom and bust market. Two years ago, we went bust and since then we are in a boom shakalaka. Oil prices closed steady after giving up gains as the June option expiration pressured prices, only to have them stay strong based on the crude realities of strong global demand and tightening supply.
Crude oil prices are pulling back from three-and-a-half-year highs after a leap in the U.S. oil rig count and a relatively calm weekend when it came to geopolitical tensions. Drillers added 10 oil rigs and 3 gas rigs bringing the total oil rig count to 844, the highest level since March 2015, according to Baker Hughes.
Mission accomplished. No, I'm not talking about the trade war, but we could be seeing progress on that, and not the attack on Syria, that has not happened, yet. No, we are talking about the global oil market rebalancing. The International Energy Agency that previously warned of lower for longer oil prices and warned last year that the oil price recovery was threatened by the possibility of weak demand now has changed its tune and is now saying that it is 'mission accomplished' for OPEC as oil stocks shrink at a record pace.
Trade War? What trade war? The fears that President Donald Trump’s threats of tariffs would plunge the globe into a devastating trade war is easing quite a bit. The Wall Street Journal reported that “'China and the U.S. have quietly started negotiating to improve U.S. access to Chinese markets, after a week filled with harsh words from both sides over Washington’s threat to use tariffs to address trade imbalances,' people with knowledge of the matter said."
Crude oil and product prices are putting in what should be a major seasonal bottom as global oil demand surges and the U.S. Petroleum Industry looks to fill the globe’s needs. In fact, the U.S. petroleum industry is doing their part to try to reduce the trade gap by exporting record amounts of oil and products. The U.S. shale revolution is touching the world in ways thought unimaginable by many just a few years ago.
Rex Tillerson out as secretary of state, inflation is stable and OPEC cuts will remain in place, a bullish American Petroleum Institute report... Crude oil prices had some wild swings yesterday as the market whipsawed from one headline to the other. Oil was modestly higher but plunged after a report that Iran was thinking to raise output to pay off some Chinese investors.
March madness started early in crude oil as prices fell on relatively light volume and focused on bearish news about ignoring bullish news at its own peril. Traders sold oil off on a report that showed an increase in supply in Cushing, Okla., but it is about time. The Nymex Storage hub has seen supply fall at a record pace in recent weeks, and seeing that we are deep into refinery maintenance we should start to see the supply recover.
Shale predictions and price predictions, sometimes they just do not get it. According to an article in today's Financial Times, OPEC is shocked by how many hedge funds really have no clue about how the oil market works. OPEC’s Secretary General Mohammad Barkindo, who met with hedge fund managers, seemed shocked that many of them had no "basic understanding" of oil and were less savvy than was widely assumed.