There is something good going on in the global economy and that is translating to higher demand and higher prices for oil. While short sighted and economically challenged people always think the lower price for energy the better, fail to grasp the realities of global trade and the real economics of production. With U.S. gas demand at a record and global demand on the rise, it reflects good economic times to come.
Crude oil prices are getting a look at terror premium as four Arab Gulf States, led by Saudi Arabia, cut diplomatic ties with Qatar as another terror attack takes place on the streets of London. Terror is becoming a top issue around the globe as ISIS took responsibility for the slaughter on London Bridge.
Oil edged higher on Wednesday as OPEC said it was committed to eroding a global surplus of crude, but increasing shale production in the United States and still-high global stocks threatened to pull prices lower.
After getting through the oil markets yesterday with a collective yawn, I was busy watching reruns of Full House to keep my day moving. At some point though I did notice that the little action that there was in crude oil, it was on the sell side. Then as I reviewed the near useless Commitment of Traders Report, I also noticed that of last Tuesday that Funds were busy adding more shorts to their portfolios.
It's Feb. 22, 2017 and I am not wearing a coat to work! In Chicago for heaven sakes! Do I need to explain any further why natural gas prices got pummeled?! Temperatures that are more in line with spring or summer has save this market from what was a structural shortage. Now because Mother Natures has saved us, it is unclear whether lower natural gas prices will inspire the type of production we will need to meet demand.